Section 2 – Own funds and prudential ratios

Section 2 – Own funds and prudential ratios

2.1 Scope of application of the law

Consolidated own funds, risk-weighted assets and solvency ratios at 31 December 2016 were determined based on the regulatory principles set out in Directive 2013/36/EU (CRD IV) and Regulation (EU) 575/2013 (CRR) dated 26 June 2013, which were transposed in the Bank of Italy's Circulars no. 285 and 286 of 17 December 2013.

Article 19 of the CRR requires to include the unconsolidated holding of the banking group in prudential consolidation.

The consolidated own funds and capital ratios refer to the Banca IFIS Group including Interbanca (formerly GE Capital Interbanca).

The measures concerning own funds provide for the gradual phase-in of a new regulatory framework, with a transitional period lasting until 2017 during which some elements that will be accounted for or deducted in full once the provisions become effective will have only a limited impact.

2.2 Banking own funds

A. Qualitative information

1. Common equity Tier 1 Capital (CET1)

A) Common Equity Tier 1 Capital (CET1)

This item includes:

  • 11,1 million Euro in paid-up capital instruments;
  • 10,9 million Euro in share premium;
  • 0,3 million Euro in own CET1 instruments;
  • 617,7 million Euro in other reserves, including retained earnings. Specifically, this item includes the 330,2 million Euro profit recognised under Own Funds pursuant to article 26 of the CRR, less 43,8 million Euro in dividends expected to be paid to the owners of the Parent;
  • other items of comprehensive income, negative to the tune of 2,7 million Euro and consisting of:
    • 0,06 million Euro in the negative reserve for actuarial losses deriving from defined-benefit plans in accordance with the new IAS19;
    • 0,8 million Euro in positive reserves for available for sale financial assets;
    • 3,4 million Euro in negative reserves from exchange differences;
  • 450,1 million Euro in minority interests given recognition in CET1.

D) Items to be deducted from CET1

This item includes the following main aggregates:

  • 50,6 million Euro in goodwill and other intangible assets.
  • 59,7 million Euro in deferred tax assets from tax losses.

E) Transitional regime - Impact on CET1 (+/-), including minority interests subject to transitional provisions

This item includes the following transitional adjustments:

  • exclusion of unrealised gains on AFS securities, totalling 0,5 million Euro (-);
  • positive filter on negative actuarial reserves (IAS 19), amounting to 0,04 million Euro (+);
  • inclusion of minority interests subject to transitional provisions, totalling 52,6 million Euro (+).

 

2. Additional Tier 1 Capital (AT1)

G) Additional Tier 1 Capital (AT1) gross of items to be deducted and the effects of the transitional regime

This item includes the minority interests included in AT1, amounting to 29,1 million Euro;

I) Transitional regime - Impact on AT1 (+/-), including instruments issued by subsidiaries that are given recognition in AT1 pursuant to transitional provisions

This item includes minority interests subject to transitional provisions eligible to be recognised in AT1, totalling 11,6 million Euro (-).

 

3. Tier 2 Capital (T2)

M) Tier 2 Capital (T2) gross of items to be deducted and the effects of the transitional regime

This item includes the minority interests included in T2, amounting to 38,7 million Euro;

O) Transitional regime - Impact on T2 (+/-), including instruments issued by subsidiaries that are given recognition in T2 pursuant to transitional provisions

This item includes minority interests subject to transitional provisions eligible to be recognised in T2, totalling 15,4 million Euro (-), and unrealised gains on AFS securities subject to transitional provisions eligible to be recognised in T2, totalling 0,08 million Euro (+)

     

B. Quantitative information

 31.12.201631.12.2015(1)
A, Common Equity Tier 1 (CET1) before application of prudential filters1,089,430430,284
of which CET1 instruments subject to transitional provisions- -
B. CET1 prudential filters (+/-)--
C. CET1 gross of items to be deducted and the effects of the transitional regime (A+/-B)1,089,430430,284
D. Items to be deducted from CET1110,34342,925
E. Transitional regime - Impact on CET1 (+/-). including minority interests subject to transitional provisions52,07676,957
F. Total Common Equity Tier 1 (CET1) (C-D+/-E)1,031,163464,316
G. Additional Tier 1 Capital (AT1) gross of items to be deducted and the effects of the transitional regime29,07224,100
of which AT1 instruments subject to transitional provisions- -
H. Items to be deducted from AT1- -
I, Transitional regime - Impact on AT1 (+/-). including instruments issued by subsidiaries that are given recognition in AT1 pursuant to transitional provisions(11,629)(14,460)
L. Total Additional Tier 1 Capital (AT1) (G-H+/-I)17,4439,640
M. Tier 2 Capital (T2) gross of items to be deducted and the effects of the transitional regime38,74432,133
of which T2 instruments subject to transitional provisions--
N. Items to be deducted from T2- -
O, Transitional regime - Impact on T2 (+/-). including instruments issued by subsidiaries that are given recognition in T2 pursuant to transitional provisions(15,421)(19,280)
P. Total Tier 2 Capital (T2) (M-N+/-O)23,32312,853
Q. Total own funds (F+L+P)1,071,929486,809

(1) Total consolidated own funds (amounting to 486.809 million Euro) differ from the amount reported in the consolidated financial statements for the year ended 31 December 2015 (501.809 million Euro) due to the 15 million Euro dividend payout approved by the Shareholders' Meeting of the parent company La Scogliera S.p.A. on 23 March 2016. The consolidated supervisory reports at 31 December 2015, as well as the relevant capital adequacy ratios, had already been adjusted at the end of March 2016 to account for said dividend payout. The data on consolidated Own Funds and capital adequacy ratios account for the impact of said distribution.

 

2.3 Capital adequacy

A. Qualitative information

The prudential ratios at 31 December 2016 account for the adjustments required by the transitional provisions applying to the financial year 2016.

At 31 December 2016, Consolidated Own Funds totalled 1.071,9 million Euro, compared with 7.003,3 million Euro in risk-weighted assets, mainly because of credit and counterparty risks, as well as, to a lesser extent, operational and market risks.

As showed in the table on the breakdown of risk-weighted assets and prudential ratios, at 31 December 2016, the Banca IFIS Group had a CET1 capital ratio of 14,72%, a Tier1 capital ratio of 14,97%, and a Total capital ratio of 15,31%.

     

B. Quantitative information

Categories/AmountsNon-weighted amountsWeighted amounts / requirements
 31.12.201631.12.201531.12.201631.12.2015
A. RISK ASSETS     
A.1 Credit risk and counterparty risk     
1. Standardised approach9,248,5947,139,7476,192,8972,704,228
2. Internal rating method----
2.1 Basic indicator approach----
2.2 Advanced measurement approach----
3. Securitisation programmes----
B. REGULATORY CAPITAL REQUIREMENTS   --
B.1 Credit risk and counterparty risk   495,432216,338
B 2. Credit valuation adjustment risk  2,340-
B 3. Settlement risk   -
B.4 Market risks     
1. Standard method  3,4823,054
2. Internal models   -
3. Concentration risk   -
B.5 Operational risk     
1. Basic indicator approach  59,01041,735
2. Standardised approach   -
3. Advanced measurement approach   -
B.6 Other calculation factors   -
B.7 Total prudential requirements   560,264261,127
C. RISK ASSETS AND CAPITAL REQUIREMENT RATIOS    -
C.1 Risk-weighted assets  7,003,3053,264,088
C.2 Common equity tier 1 capital / Risk-weighted assets (CET1 Capital ratio)14.7214.22 (1) 
C.2 Tier 1 Capital / Risk-weighted assets (Tier 1 capital ratio)14.9714.52 (1) 
C.4 Total own funds / Risk-weighted assets (Total capital ratio)15.3114.91 (1) 
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(1) Total consolidated own funds (amounting to 486.809 million Euro) differ from the amount reported in the consolidated financial statements for the year ended 31 December 2015 (501.809 million Euro) due to the 15 million Euro dividend payout approved by the Shareholders' Meeting of the parent company La Scogliera S.p.A. on 23 March 2016. The consolidated supervisory reports at 31 December 2015, as well as the relevant capital adequacy ratios, had already been adjusted at the end of March 2016 to account for said dividend payout. The data on consolidated Own Funds and capital adequacy ratios account for the impact of said distribution.