May 8, 2020 / 5:09 PM / a month ago

Bank of Portugal postpones capital buffer phase-in for banks to January 2022

LISBON (Reuters) - The Bank of Portugal said on Friday it had postponed a phased increase in capital buffers for banks identified as “other systemically important institutions” by one year to Jan. 1, 2022, as part of its response to the coronavirus pandemic.

“The Bank of Portugal intends to use all available policy instruments to prevent the banking system from acting as an amplifying channel of the shock triggered by the outbreak,” it said in a statement, adding it aimed to ensure the banking system maintained a supply of credit to the economy

It had notified the European Central Bank, which did not object to the decision, it added.

Under previously announced guidelines, state-owned Caixa Geral de Depositos will have the highest buffer of 1% of the capital when the phase-in begins, up from the current 0.75%, followed by Millennium bcp (BCP.LS), with 0.75%, up from 0.563%.

Out of six institutions on the Bank of Portugal’s list that includes also Santander Totta, Banco BPI and LSF Nani Investments, the smallest new buffer of 0.25% is envisaged for Caixa Economica Montepio Geral.

The same buffers are to remain in force as of January 2023 for all the institutions, except for Millennium bcp which will move up to 1% buffer on that date, ending its phase-in period as previously agreed with the Bank of Portugal.

Reporting by Andrei Khalip; Editing by Hugh Lawson and David Evans

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