MADRID - Banco Bilbao (NYSE:BBVA) Vizcaya Argentaria S.A. (BBVA (BME:BBVA)) has announced the minimum capital requirements set by the European Central Bank (ECB) for the year 2025. Following the Supervisory Review and Evaluation Process (SREP), BBVA is required to maintain a total capital ratio of 13.29% and a Common Equity Tier 1 (CET1) capital ratio of 9.13% at the consolidated level starting January 1, 2025.
The new capital ratios include a Pillar 2 requirement of 1.68%, with a minimum of 1.02% to be met with CET1 capital. This Pillar 2 requirement incorporates a 0.18% component based on the ECB's prudential provisioning expectations. At the individual level, BBVA must maintain a total capital ratio of 12.14% and a CET1 ratio of 7.98%. The individual Pillar 2 requirement is set at 1.5%, with at least 0.84% to be covered with CET1.
The capital requirements are part of a regulatory framework designed to ensure the stability and resilience of financial institutions. BBVA's capital ratios are composed of the following components: Pillar 1 requirements at 4.50% for CET1 and 8.00% for total capital; Pillar 2 requirements; a conservation buffer of 2.50%; an Other Systemically Important Institution (O-SII) buffer of 1.00% at the consolidated level; and a countercyclical buffer, which is 0.11% at the consolidated level and 0.14% at the individual level based on data as of September 2024.
These requirements reflect the ECB's assessment of the bank's risk profile and its ability to absorb economic shocks. It is important to note that the information presented in this article is based on a press release statement from BBVA. The bank's adherence to these regulatory capital requirements is essential for maintaining investor confidence and the overall health of the financial system.
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