Credit Agricole Exceeds New ECB Minimum Capital Requirement

  • Bank must maintain ratio of 9.75%, including 0.25% buffer
  • Lender had 13.3% common equity ratio at end of September

Credit Agricole SA, France’s second-largest bank by assets, said it’s well above the minimum capital levels that will be required by the European Central Bank starting next month.

Credit Agricole Group, the entity tracked by regulators, must have a common equity Tier 1 ratio of at least 9.75 percent, including a quarter-point buffer for global systemically important banks, the Montrouge-based bank said in a statement on Monday. Credit Agricole Group had a CET1 ratio of 13.3 percent at the end of September, the company said.

Credit Agricole rose as much as 2.7 percent and was up 2.2 percent at 11.12 euros by 11:12 a.m. in Paris trading, the best performer among the 45 members of the STOXX Europe 600 Banks Index. The stock is down 1.6 percent this year, giving the company a market value of about 28 billion euros ($30.6 billion).

Several European lenders have published their new minimum capital ratios, which are set by the ECB’s Supervisory Review and Evaluation Process. Those requirements can dictate whether the banks can pay out dividends on stock and bonuses to some employees. UniCredit SpA disclosed earlier this month that it faces a minimum ratio of 10 percent, leaving it with the smallest capital margin among Italy’s biggest banks as of September.

Credit Agricole shares have tumbled 27 percent since the end of July, partly because the bank signaled early in August that it failed to win backing from regulators for a reorganization that could have freed up cash for investors. Credit Agricole has been seeking to reorganize financial links with the regional banks that own a majority stake in the lender and which it owns shares in.

For Credit Agricole SA, the bank’s listed company, the ECB’s CET1 minimum will apply from June. Credit Agricole SA had a CET1 ratio of 10.4 percent at the end of September and aims to operate at about 11 percent by the end of next year, according to the statement. The quarter-point G-SIB buffer, which doesn’t apply to the listed company, may increase to 1 percentage point by 2019, the bank said.

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