Banco Santander Says It Exceeds New ECB Capital Requirement

  • Lender must maintain ratio of 9.75%, including 0.2% buffer
  • Lender had 12.39% common-equity ratio at end of September

Banco Santander SA, Spain’s largest lender by assets, said it exceeds the minimum capital levels that the European Central Bank will require the company to have starting next month.

The Madrid-based bank needs a common equity Tier 1 ratio of at least 9.75 percent at the start of January, including a 0.25 percent buffer for global systemically important banks, Banco Santander said in a regulatory filing on Wednesday. The company had a CET1 ratio of 12.39 percent at the end of September.

The ECB’s Supervisory Review and Evaluation Process set European lenders new minimum capital ratios that can dictate whether the banks can pay out dividends on stock and bonuses to some employees. Credit Agricole Group said Monday it faces a minimum ratio of 9.75 percent, while Italy’s UniCredit Spa said earlier this month it’s new requirement is 10 percent.

Banco Santander Chairman Ana Botin has been under pressure from investors over the fact that the company’s capital ratio that is lower than most of its European peers. The bank aims to achieve a fully loaded common equity Tier 1 ratio of more than 11 percent by 2018. The ratio -- a measure of a company’s ability to withstand losses in periods of turmoil -- stood at 9.9 percent in September, the second lowest among Europe’s 25 largest publicly traded banks.

Banco Bilbao Vizcaya Argentaria SA, Spain’s second largest bank, said late Wednesday the ECB requires it to have a common equity Tier 1 ratio of at least 9.75 percent in 2016, including a 0.25 percent buffer. Bankia SA needs a ratio of at least 10.25 percent, the same as Banco Popular Espanol SA, while Banco de Sabadell SA has to maintain a minimum ratio of 9.25%, according to regulatory filings. All of the lenders exceeded the new requirements as of September.

Before it's here, it's on the Bloomberg Terminal.