Nordea's Pillar 2 Capital Requirement to Be Reduced
Nordea Bank Abp's Pillar 2 requirement (P2R) will be reduced from 1.75% to 1.60%, effective January 1, 2023. The European Central Bank announced the decision on December 21 as part of its annual SREP process.
Nordea Bank Abp will see its Pillar 2 requirement (P2R) decrease from 1.75% to 1.60%, starting January 1, 2023. The European Central Bank (ECB) communicated this decision on December 21, following its annual Supervisory Review and Evaluation Process (SREP).
The Common Equity Tier 1 (CET1) capital requirement within the P2R will consequently be lowered from 0.98% to 0.90%. This adjustment will reduce Nordea Group's CET1 requirement by 8 basis points. At the end of the third quarter of 2022, the Group's CET1 requirement stood at 10.8%.
The Pillar 2 requirement is a bank-specific capital buffer that supplements the minimum capital requirement, known as Pillar 1. Regulatory guidelines stipulate that banks must meet the P2R with at least 75% of Tier 1 capital and 56.25% of CET1 capital.
The revised, lower capital requirement takes effect from the beginning of 2023. Nordea operates as a universal bank with a 200-year history of supporting and growing Nordic economies.