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Millennium says capital ratio slips with Angola exposure
December 17, 2014 / 1:01 PM / 3 years ago

Millennium says capital ratio slips with Angola exposure

LISBON, Dec 17 (Reuters) - Millennium bcp, Portugal’s largest listed bank, said on Wednesday that new regulatory rules by the European Commission will cut its common equity Tier 1 capital ratio by 8 basis points due to its exposure to Angola.

The change happened as a consequence of the European Commission excluding Angola from a list of countries where regulatory rules are equivalent to the European Union‘s.

The non-inclusion means “that the risk weights in accordance with the capital requirements regulation directive have to be applied instead, resulting in an increase of around 560 million euros in risk-weighted assets from Jan. 1, 2015,” Millennium, which has a subsidiary in Angola, said in a statement.

That increase resulted in a fall of 8 basis points in Millennium’s common equity tier 1 fully-implemented capital ratio and a 15 basis point drop in its phased-in ratio.

At the end of September, Millennium’s common equity tier 1 capital ratio stood at 10.2 percent and its phased-in ratio was at 12.8 percent.

In October, Millennium failed in Europe-wide health checks that measured its end-2013 accounts, but said it has already taken measures in 2014 and does not need to raise capital or sell strategic assets.

Millennium’s smaller rival, Banco BPI, said on Tuesday its common equity Tier 1 capital ratio would fall by a much steeper 90 basis points to 8.9 percent with the change to its Angolan exposure. Banco BPI controls Angola’s largest bank BFA.

Millennium shares were down before the announcement and were 3.5 percent lower by 1247 GMT, while BPI shares had lost 5.8 percent. (Reporting by Axel Bugge; Editing by Andrei Khalip and David Holmes)

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