NORD/LB: Core Tier 1 capital further strengthend
NORD/LB Norddeutsche Landesbank is going to increase its Core Tier 1 capital. This will be largely achieved by restructuring existing silent participations. The bank will also retain earnings of several hundred millions. The package of measures will also include income from the sale of investments. With this package NORD/LB expects to achieve a Core Tier 1 capital ratio of 9.5 per cent by 30 June 2012 in accordance with the European Banking Authority (EBA) defini¬tion. Overall the plan expects to increase the Core Tier 1 capital by up to 1 billion euros. An appropriate concept was sent to Germany’s Financial Supervisory Authority.
By the end of 2011, NORD/LB had strengthened its share capital by 1.67 billion euros and therefore already covered most of the capitalisation requirement of 2.489 billion euros demanded by the EBA at the start of December 2011. Against the background of the national debt crisis, the EU increased its capital requirements for banks at its summit in October 2011. By 30 June 2012 the banks have to have a Core Tier 1 capital ratio of 9 per cent in accordance with a definition prepared by the EBA, in which existing silent participations are not included as capital instruments. NORD/LB still has silent participations totalling 1.95 billion euros.
“We have agreed the course of action with our owners and are now discussing the next steps with the supervisory authority,” explained Dr. Gunter Dunkel, Chairman of NORD/LB’s Managing Board. “We will meet the capital requirements of the EU in full and on time. Despite the difficult market environment, the bank continues to operate profitably. With the capital measures implemented at the end of 2011, the regulatory core capital ratio will rise to almost 10 per cent. One year ago it was 7.9 per cent. This shows that we are heading in the right direction with the capital-boosting programme that we launched early at the start of 2011.”
NORD/LB Corporate Communication