Commerzbank: ECB sets capital requirements for 2020 (SREP)

Commerzbank: ECB sets capital requirements for 2020 (SREP)


  • Bank-specific capital requirements (Pillar 2 Requirement, P2R) of 2% unchanged to previous year
  • Pure CET1 requirement for 2020 at 10.63% and CET1 requirement including AT1 shortfall at 11.36% (MDA threshold)
  • Final regulatory phase-in of the O-SII buffer to 1.5% in 2020

The European Central Bank (ECB) has set the bank-specific capital requirements for Commerzbank following the 2019 Supervisory Review and Evaluation Process (SREP). The amount of the additional capital requirement for Pillar 2 (P2R) as defined in the SREP is unchanged to the previous year at 2% CET1.

Based on the risk weighted assets (RWA) as of 30 September 2019, the CET1 requirement as of 1 January 2020 is 11.36% overall. This requirement corresponds to the so-called maximum distributable amount (MDA) threshold above which Commerzbank is not subject to any legal restrictions regarding dividend payments, interest payments to holders of AT1 securities and variable remuneration.

The requirement consists of the CET1 Minimum of 4.5%, the Pillar 2 Requirement (P2R) of 2.0%, the capital conservation buffer of 2.5%, the buffer for otherwise systemically important institutions (O-SII) of 1.5% and the countercyclical capital buffer of currently 0.13%. This results in a pure CET1 requirement of 10.63% (2019: 10.11%). Furthermore 0.73% of the Tier 1 requirement is covered by CET1 capital (AT1 shortfall). The AT1 shortfall had been reduced by the successful AT1 issuance in July 2019. The planned sale of mBank increases the chances that the German O-SII buffer will fall again by 50 basis points in the future.

The CET1 ratio of Commerzbank of 12.8% as of 30 September 2019 was well above regulatory requirements.

About Commerzbank
Commerzbank is a leading international commercial bank with branches and offices in nearly 50 countries. The Bank’s two business segments – Private and Small Business Customers and Corporate Clients – offer a comprehensive portfolio of financial services precisely tailored to their customers’ needs. Commerzbank transacts approximately 30% of Germany's foreign trade and is the market leader in German corporate banking. The Bank offers its sector expertise to its corporate clients in Germany and abroad and is a leading provider of capital market products. Its subsidiaries, Comdirect in Germany and mBank in Poland, are two of the world’s most innovative online banks. With approximately 800 branches going forward, Commerzbank has one of the densest branch networks in Germany. The Bank serves more than 11 million private and small business customers nationwide and over 70,000 corporate clients, multinationals, financial service providers, and institutional clients worldwide. Its Polish subsidiary mBank S.A. has around 5.6 million private and corporate customers, predominantly in Poland, but also in the Czech Republic and Slovakia. In 2018 Commerzbank generated gross revenues of €8.6 billion with approximately 49,000 employees.

This release contains forward-looking statements. Forward-looking statements are statements that are not historical facts. In this release, these statements concern inter alia the expected future business of Commerzbank, efficiency gains and expected synergies, expected growth prospects and other opportunities for an increase in value of Commerzbank as well as expected future financial results, restructuring costs and other financial developments and information. These forward-looking statements are based on the management’s current plans, expectations, estimates and projections. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. Such factors include the conditions in the financial markets in Germany, in Europe, in the USA and other regions from which Commerzbank derives a substantial portion of its revenues and in which Commerzbank holds a substantial portion of its assets, the development of asset prices and market volatility, especially due to the ongoing European debt crisis, potential defaults of borrowers or trading counterparties, the implementation of its strategic initiatives to improve its business model, the reliability of its risk management policies, procedures and methods, risks arising as a result of regulatory change and other risks. Forward-looking statements therefore speak only as of the date they are made. Commerzbank has no obligation to update or release any revisions to the forward-looking statements contained in this release to reflect events or circumstances after the date of this release.