ACPR, the French Prudential and Resolution Supervision Authority, implementing the decision of the Single Resolution Board, has just notified the updated requirements.
The updated total Minimum Requirement for Own Funds and Eligible Liabilities (“MREL”) of Groupe BPCE has been set at a level equivalent to 24.2% of its risk-weighted assets (“RWAs”) as of end December 2017, slightly down in comparison with the initial requirement notified in April 2018.
In addition, for the first time, ACPR has notified the subordinated MREL requirement(1) of Groupe BPCE: it has been set at a level equivalent to 19.5% of its RWAs as of end December 2017.
Groupe BPCE remains well above the updated requirements: the Group’s total MREL ratio was 29.1% based on RWAs as of end September 2019 (versus an updated requirement of 24.1%(2) as of end September 2019) and the Group’s subordinated MREL ratio (similar to the TLAC ratio) was 23.2% as of end September 2019 (versus a requirement of 19.4%(2) as of end September 2019).
(1) Please note that this subordinated MREL requirement is based on the BRRD1 of 2014 ("Bank Recovery and Resolution Directive"), and not on the new version called BRRD2 adopted last spring by the institutions of the European Union
(2) As the requirements (total and subordinated) are set as percentages of Total Liabilities and Own Funds (“TLOF”), when expressed as a percentage of RWAs, the percentages may vary slightly over time depending on the evolution of the ratio of TLOF over RWAs