Mps, the ECB removes the ban on dividends after the capital increase

The European Central Bank promotes Monte dei Paschi post-capital increase of 2 and a half billion, of which 1.6 billion injected from the public hand through the Treasury, the main shareholder.

The oldest bank in the world communicated before the reopening of the markets in the aftermath of the Christmas break that the BCE sent Siena the final decision regarding the capital requirements to be respected starting from 1 January 2023. “Considering the successful outcome of the capital increase operation for 2.5 billion euros – reads a note – the ECB has, moreover, the ban on the distribution of dividends has been removed, replacing it with the obligation for the Bank to obtain prior authorization from the Supervisory Authority”.

The note describes the requirements with regard to capital solidity (the so-called SREP requirement at an overall level, i.e TSCR extension, total SREP capital requirement): is set at 10.75% for next year and includes:

• a minimum requirement of own funds – Pillar 1 (“P1R”) of 8% (of which 4.50% in terms of CET1) and
• an additional Pillar 2 (“P2R”) requirement of 2.75%, which stands at the same level that was required for 2022, to be held for at least 56.25% in the form of common equity tier 1 capital – CET1 – and 75% in the form of Tier 1 capital.

The overall minimum requirement in terms of Total Capital ratio, obtained by adding a Combined Buffer Requirement (CBR) of 2.75% to the TSCR, is 13.50%. The overall minimum requirement in terms of CET 1 ratio is 8.80%. Lastly, the note takes stock of the Bank’s capital ratios at a consolidated level as at 30 September 2022, taking into account the capital increase concluded on 4 November for approximately €2.5 billion and the related costs. These are: 15.7% for the Common Equity Tier 1 ratio, 15.7% for the Tier 1 ratio, 19.5% for the Total Capital ratio, calculated by applying the transitional criteria in force for 2022; 14.7% for the Common Equity Tier 1 ratio, 14.7% for the Tier 1 ratio, 18.5% for the Total Capital ratio, calculated by applying the fully loaded criteria. As regards Pillar II Capital Guidance (P2G), it is confirmed at 2.50%, to be met with Common Equity Tier 1.