In January, the Estonian FSA, Finantsinspektsioon, presented LHV Group with the
outcome of Supervisory Review and Evaluation Process (SREP) capital adequacy
calculation. In comparison with earlier the Pillar 2 capital requirement and the
systemic importance buffer have been raised.
According to the decision of the FSA, an additional requirement for own funds in
the amount 2.74% applies to LHV Group, of which at least 1.54% must be covered
by Core Tier 1 own funds and at least 2.06% by Tier 1 capital.
The Supervisory Board of LHV Group based on the FSA decision and adding to it
internal buffers decided to set total CAD target ratio at 16.50%, Tier 1 ratio
at 13.50% and Core Tier 1 ratio to 11.50%.
Underneath is the target split into components:
Core Tier 1 Tier 1 Total CAD
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Base requirement 4.50% 6.00% 8.00%
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Pillar 2 capital requirement 1.54% 2.06% 2.74%
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Total SREP requirement 6.04% 8.06% 10.74%
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Capital conservation buffer 2.50% 2.50% 2.50%
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Systemic importance buffer (O-SII) 1.50% 1.50% 1.50%
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Systemic risk buffer 0.00% 0.00% 0.00%
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Discretionary counter-cyclical buffer 0.00% 0.00% 0.00%
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Total combined buffer 4.00% 4.00% 4.00%
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Total minimal regulatory requirement 10.04% 12.06% 14.74%
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Additional internally decided buffers 1.46% 1.44% 1.76%
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Group's internal capitalization targets 11.50% 13.50% 16.50%
Priit Rum
LHV Communication Manager
Phone: +372 502 0786
Email: priit.rum@lhv.ee (mailto:priit.rum@lhv.ee)
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