Based on the decision of the MNB, the phase-in of the capital buffers ensuring the stability of systemically important banks will be completed by 2020Print
Budapest, 2 December 2019 – In autumn 2019 the MNB reviewed the list of systemically important credit institutions domiciled in Hungary. Based on the regular annual review, the list of the institutions concerned has remained unchanged, in line with the robustness of the identification process and of the banking market structure. According to the decision of the MNB’s Financial Stability Board in 2016, the capital requirement for domestic systemically important banks becomes effective starting in 2017 in a gradually increasing manner over a four-year period, which supports banks’ adaptation and strengthens financial stability. According to the announced phase-in trajectories of the buffer rates, concerned credit institutions have to maintain the total value of the capital buffer from 1 January 2020.
The potential serious financial impediment of systemically important institutions (O-SIIs) may affect them and their clients adversely; furthermore, through contagion effects, this may pose a threat to the functioning of the financial intermediary system as a whole and may indirectly lead to problems for the real economy as well. For this reason, the central bank, acting in its macroprudential capacity, defines and annually reviews the list of domestic systemically important institutions, and prescribes capital buffers for them to decrease the probability of their default based on their significance. In 2019, the Magyar Nemzeti Bank (MNB), based on 2018 year-end data, reassessed and, as a result, reaffirmed the systemic importance of the eight institutions identified last year.
In order to strengthen their shock absorbing capacity, starting in 2017, in line with international regulatory practices, the central bank set capital buffer requirements in the range of 0.5 to 2 percent for the institutions affected, which will have to be completed gradually. From 1 January 2020, according to the decision of the MNB’s Financial Stability Board, the capital buffer rates will increase along the announced phase-in paths, reaching their target levels. Besides enhancing financial stability, the gradual phase-in of the requirements has contributed to healthy lending and provided adequate time for the preparation of the institutions concerned to meet their obligations.
Scores used for the identification of systemically important credit institutions and the schedule of their capital buffer rates
|Name of the institution||Score||Capital buffer rate|
|OTP Bank Nyrt.||3192||2.00%|
|UniCredit Bank Hungary Zrt.||943||1.00%|
|Kereskedelmi és Hitelbank Zrt.||842||1.00%|
|Erste Bank Hungary Zrt.||642||0.50%|
|Raiffeisen Bank Zrt.||613||0.50%|
|CIB Bank Zrt.||456||0.50%|
|MKB Bank Nyrt.||381||0.50%|
Note: The identification in 2019 was based on audited consolidated data as of 31 December 2018.
Magyar Nemzeti Bank