The National Bank of Hungary (NBH), in its capacity as a national resolution authority, on 13 June 2023 notified Erste Bank Hungary Zrt. about its MREL requirement (Minimum Requirement for own funds and Eligible Liabilities) set in a joint decision with the Group resolution authority and calibrated on balance sheet data as of 31 December 2021 and the Bank Recovery and Resolution Directive (BRRD).
Erste Bank Hungary Zrt. as the resolution entity of the Hungarian resolution group, must comply with binding interim MREL requirements equivalent to 19.00% (excluding the Combined Buffer Requirement (CBR)) of the Total Risk Exposure Amount (TREA) and 5.82% of the Leverage Ratio Exposure (LRE) of the Hungarian resolution group starting from 1 January 2022.
The MREL requirements on fully loaded basis, effective from 1 January 2024, are equivalent to 24.86% of TREA (excluding CBR) and 5.84% of LRE of the Hungarian resolution group, respectively.
In summary, the following MREL requirements have been set:
19.00% of TREA from 01.01.2022 (binding)
21.43% of TREA from 01.01.2023 (non-binding)
24.86% of TREA from 01.01.2024 (binding).
In addition, the minimum subordination requirements were set at a level of 13.50% of TREA (excl. CBR), 5.00% of LRE and 8,00% of TLOF, thereby specifying the amount of the total MREL requirements that must be met with subordinated instruments such as regulatory capital, subordinated debt and senior non-preferred debt.
The TREA of the Hungarian resolution group as of 31 December 2021 (as applied by SRB for the MREL calibration) amounted to EUR 5 868 million and LRE to EUR 12 092 million.
The table below summarises the current MREL and subordination requirements:
Erste Bank Hungary Zrt.’s long term capital and funding plan has been adjusted in order to ensure compliance with the aforementioned requirements.
In addition, Erste Befektetési Zrt. (EIH) which is part of the Hungarian Resolution Group is subject to an internal MREL requirement and has been notified accordingly.
EIH must comply with binding interim MREL requirements equivalent to 24.42% (excluding the Combined Buffer Requirement (CBR)) of the Total Risk Exposure Amount (TREA) and 5.82% of the Leverage Ratio Exposure (LRE) starting from 1 January 2022, furthermore it has to comply with interim MREL requirements equivalent to 24.86% (excluding the Combined Buffer Requirement (CBR)) of the Total Risk Exposure Amount (TREA) and 5.84% of the Leverage Ratio Exposure (LRE) starting from 1 January 2024.
In case of Erste Lakástakarékpénztár Zrt. (ELTP) and Erste Jelzálogbank Zrt. (EJZB) the NBH waived the application of the individual MREL requirement.
For more information, please contact:
Erste Bank Hungary, Investor Relations, Népfürdő utca 24-26., 1138 Budapest, Hungary
Gábor Bara Email: gabor.bara@erstebank.hu
István Márk Király Email: istvanmark.kiraly@erstebank.hu