Deutsche Bank publishes 2022 SREP requirements

Deutsche Bank AG (XETRA: DBKGn.DE / NYSE: DB) has been informed by the European Central Bank (ECB) of its decision regarding prudential capital requirements to be maintained from 1 March 2022 onwards, following the 2021 Supervisory Review and Evaluation Process (SREP). The ECB’s decision requires Deutsche Bank, on a consolidated basis, to maintain an unchanged Pillar 2 requirement (P2R) of 2.50% of which at least 1.41% must be covered by Common Equity Tier 1 (CET 1) capital, and 1.875% by Tier 1 capital.

The ECB’s decision requires Deutsche Bank, on a consolidated basis, to maintain a Common Equity Tier 1 (CET 1) capital ratio of at least 10.43%. This CET 1 capital requirement comprises: the minimum Pillar 1 requirement of 4.50%; the Pillar 2 requirement of 1.41%; the capital conservation buffer of 2.50%; the countercyclical buffer of 0.03% as at year end 2021; and the requirement arising from the maximum of the buffers from Deutsche Bank’s designation as a Global Systemically Important Institution (G-SII) or as an Other Systemically Important Institution (O-SII) of 2.00%.  

This requirement sets the level below which Deutsche Bank would be required to calculate a Maximum Distributable Amount (MDA). The MDA is used to determine restrictions on distributions in the form of dividends on CET 1 capital, new variable remuneration and coupon payments to holders of Additional Tier 1 instruments.  

The ECB has also set new minimum requirements for other capital definitions. Corresponding 2022 requirements are set for Deutsche Bank’s Tier 1 capital ratio (12.40%) and Total capital ratio (15.03%). In comparison, Deutsche Bank’s last reported consolidated capital ratios on a phase-in basis were 13.23% CET 1 capital ratio, 15.75% Tier 1 capital ratio and 17.84% Total capital ratio, all preliminary as of 31 December 2021.