Saturday, 21 December 2024
Basel III monitoring shows stable capital and liquidity ratios in H2 2023
Basel III capital and liquidity ratios remained stable in the second half of 2023, according to the latest Basel III monitoring exercise, published today.
Current capital ratios increased slightly, and capital ratios on a fully phased-in Basel III basis decreased slightly. In the same period, the dividend payout ratio for large internationally active banks remained stable.
The report, based on data as of 31 December 2023, sets out trends in current bank capital and liquidity ratios and the impact of the fully phased-in Basel III framework. This includes the December 2017 finalisation of the Basel III reforms and the January 2019 finalisation of the market risk framework. It covers both large internationally active banks (Group 1) and other smaller banks (Group 2).
The implementation of the final elements of the Basel III minimum requirements began on 1 January 2023. In the second half of 2023, the average impact of the fully phased-in final Basel III framework on the tier 1 minimum required capital (MRC) on Group 1 banks was +1.3%, compared with +2.4% at the end of June 2023. Group 1 banks report no total regulatory capital shortfalls, compared with a shortfall of EUR 3.3 billion ($3.6 billion) at the end of June 2023.
The monitoring exercise also collected bank data on Basel III liquidity requirements. The weighted average liquidity coverage ratio (LCR), at 138% for Group 1 banks, is stable compared with the previous reporting period. Three Group 1 banks reported an LCR below the minimum requirement of 100%.
The weighted average net stable funding ratio (NSFR) decreased to 123% for Group 1 banks. All banks reported an NSFR above the minimum requirement of 100%.
Re-disseminated by The Asian Banker
