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2018 Pillar 3 Disclosures
Capital
Eligible capital
3 | 3.1
The total eligible capital at 31 December 2018 stands at €791 million, all of which is Common
Equity Tier 1 capital.
The characteristics of the eligible capital and their composition are set out below.
Tier 1 Capital
For the purposes of the calculation of minimum capital requirements, Tier 1 capital is understood
as the elements defined as such, taking into consideration the corresponding deductions, in Part
Two, Title I, Chapters 1, 2 and 3 of Regulation (EU) Nº 575/2013.
Common Equity Tier 1 capital components are characterised as equity that can be immediately
used without restriction in order to cover risks or losses as soon as they occur, being recorded for
their amount free of any foreseeable tax at the time of calculation.
The Common Equity Tier 1 capital of the bank at 31 December 2018 amounts to €791 million,
predominantly consisting of paid-up equity instruments, the share issue premium and retained
earnings. The amounts corresponding to intangible assets incorporated within equity have been
deducted from this.
As in previous financial years, a reduction in Common Equity Tier 1 capital is carried out due
to prudential filters - the result of the application of Commission Delegated Regulation (EU)
2016/101, of 26 October 2015, with regard to regulatory technical standards for prudent
valuation. This completes Regulation (EU) no. 575/2013 and establishes requirements regarding
prudent reductions of the value of positions on the banking book, at a fair value. Cecabank
calculated a reduction using a simple approach which, as at 31 December 2018, resulted in a
Tier 1 Capital reduction of €4.7 million.
The following table gives a breakdown of the eligible capital of Cecabank at 31 December 2018.
There is no longer a difference between the fully-loaded and phase-in approaches, at completion
of the transition schedule that envisages the realisation of certain regulatory adjustments applied
by the bank to calculate capital under the phase-in approach. From January 2018, the fully-
loaded and phase-in calculations converge, as the aforementioned regulatory adjustments are no
longer in place. The bank is not applying the transitional provisions set forth in Regulation (EU)
No. 2395/2017 to mitigate the impact of the introduction of IFRS 9.
3.1.1