The Financial Supervisory Commission (FSC) yesterday designated First Commercial Bank (第一銀行) the nation’s sixth domestic systemically important bank (D-SIB).
In June last year, the commission designated CTBC Bank (中國信託銀行), Cathay United Bank (國泰世華銀行), Taipei Fubon Bank (台北富邦銀行), Mega International Commercial Bank (兆豐銀行) and Taiwan Cooperative Bank (合庫銀行) D-SIBs due to their importance to the banking system.
To meet D-SIB status, the commission reviews the bank’s market capitalization, its interconnectedness with its peers, its substitutability with its peers in relation to functions and services, and the complexity of its operations, in line with standards set by the Basel Committee on Banking Supervision, it said.
When the commission evaluates a bank for D-SIB categorization, it reviews their data over the past two years, Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) told a news conference in New Taipei City.
The FSC did not designate First Bank a D-SIB last year, as its performance in 2017 did not meet the criteria, but its performance in 2018 and last year did, Lin said.
The commission requires these banks to maintain a minimum common equity tier-1 ratio of 11 percent, a minimum tier-1 capital ratio of 12.5 percent and no less than 14.5 percent in total capital adequacy ratio, it said.
The new capital cushion standards are 4 percentage points higher than those for regular banks, the commission said.
First Bank’s common equity tier-1 ratio stood at 10.67 percent as of the end of September, with a tier-1 capital ratio of 11.22 percent and total capital adequacy ratio of 13.17 percent, FSC data showed.
Among the first D-SIBs, only Cathay United Bank met the three requirements, with its common equity tier-1 ratio, tier-1 capital ratio and total capital adequacy ratio standing at 11.82 percent, 13.45 percent and 16.13 percent respectively as of the end of September, the data showed.
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