UniCredit: The ECB could raise its capital requirements “minimally”


(Reuters) – Italian bank UniCredit said on Friday that capital requirements for the European Central Bank (ECB) could rise slightly but that would not impact its plans for distributing it to investors.

Bloomberg previously reported that the ECB had told UniCredit that it was considering raising the group’s Pillar 2 (P2R) requirement from the current 1.75%.

“Based on the ECB’s preliminary communication, P2R could rise minimally from the current 175 basis points,” the bank said in a statement.

“There is indeed no impact on UniCredit’s 2022 and future distribution ambitions, funding plan and capital targets, which remain on track,” she added.

UniCredit chief executive Andrea Orcel has pledged to return more than €16 billion to investors in the form of dividends and share buybacks by 2024.

The group said it would provide a further update after receiving the formal assessment and final outcome from the ECB.

The bank has already repaid around 29 billion euros in ECB loans, a UniCredit spokesman said on Friday.

This early repayment leaves the group with approximately €78 billion of outstandings linked to the targeted longer-term refinancing operations (TLTRO) III.

The ECB prompted banks to shed these loans by removing a rate subsidy in October and its banking supervisor called on eurozone banks to preserve capital in the face of deteriorating economic prospects.

(Reporting Aarati Krishna in Bangalore and Keith Weir in London, French version Federica Mileo, editing by Kate Entringer)

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