Industry & Business

Bank of Ireland Issues Credit Default Swap During Capital Requirements Revision

 Breaking News
  • Grand Canal Innovation District Planned For Dublin A far-reaching plan for the creation of the Grand Canal Innovation District in Dublin has been launched. The proposal from Trinity College Dublin is modelled on innovation districts in cities such as Boston, Toronto, Rotterdam and Barcelona. It will significantly strengthen Ireland’s competitive advantage when developing new indigenous companies or competing for foreign direct investment. [...]...
  • Heiton Buckley Unveils Newly Refurbished Mayo Branch Heiton Buckley, Ireland’s leading supplier of doors, floors, bathrooms, garden, plumbing and heating products, has officially unveiled its newly refurbished branch in Castlebar, County Mayo . GAA star, Andy Moran, CEO of Grafton Merchanting ROI, Patrick Atkinson, Heiton Buckley Castlebar Branch Manager, Mick Kane, and longtime customer Mick Duane officially cut the ribbon and kicked [...]...
  • Export Sales by Enterprise Ireland Client Companies Hit New Record Enterprise Ireland, the state agency responsible for helping Irish companies export to international markets, has announced that its clients recorded export sales of €22.71 billion in 2017, representing a 7 per cent increase on 2016. This is the highest level of export sales recorded in the history of the agency and the eighth-consecutive year of [...]...
  • BAM Wins €25 Million Contract to Build New Cheese Factory in Cork TINE Ireland, a subsidiary of the Norwegian dairy co-operative TINE, has awarded the construction of a new Jarlsberg® cheese production facility and administration building at Mogeely, County Cork, to BAM Ireland. The contract value is more than €25 million. TINE is Norway’s largest producer, distributor and exporter of dairy products with 11,400 members (owners) and [...]...
  • HBAN Scoops Major European Business Angel Network Award HBAN (Halo Business Angel Network), the all-island organisation responsible for the promotion of business angel investment, and a joint initiative of Enterprise Ireland and InterTradeIreland, was crowned Globally Networked Organisation 2018 at the recent EBAN (European Business Angel Network) Awards Ceremony held in Sofia, Bulgaria. HBAN was awarded the prominent European accolade in recognition of the significant [...]...

Bank of Ireland Issues Credit Default Swap During Capital Requirements Revision

Bank of Ireland Issues Credit Default Swap During Capital Requirements Revision
December 27
11:49 2016

Bank fo Ireland announced on  Friday that it was executing a credit risk transfer transaction on a portfolio of business banking and corporate loan assets effective 29 December 2016. The bank also announced that it was revising its calculation of capital requirements under the Internal Ratings Based (IRB) approach on its Republic of Ireland mortgage portfolio.

The move comes ahead of a review of euro zone banks by the European Central Bank next year as new standards are adopted, according to Joe Brennan writing in the Irish Times.

The bank of Ireland Group expects the combined net impact from these capital developments on the Group’s transitional CET1 ratio to be a reduction of c.15bps (fully loaded CET1 ratio: c.20bps).

The credit risk transfer transaction on a reference portfolio of c.€3 billion of loan assets is expected to benefit the Group’s transitional CET1 ratio by c.50bps, the Group’s fully loaded CET1 ratio by c.40bps and the Group’s transitional Total Capital ratio by c.65bps.

The transaction involves the execution of a credit default swap backed by c.€185 million of credit linked notes issued by Grattan Securities DAC to a small group of international investors. The transaction reduces the Group’s credit risk exposure, and consequently the risk weighted assets on the reference portfolio of loan assets, through a risk sharing structure whereby the buyers of the notes assume the credit risk for c.€185 million of potential credit losses on the reference portfolio of loan assets in return for an initial annual coupon (interest expense) of c.€21 million.

No assets will be derecognised from the Group’s balance sheet, the bank said. The reference portfolio of loan assets and related customer relationships will continue to be maintained by the Group.

Meanwhile, the bank is revising its calculation of capital requirements under the IRB approach on its ROI mortgage non-defaulted loan portfolio. The revision is in advance of the ECB’s targeted review of internal models (TRIM) due to commence early next year and increases the pro-forma average credit risk weighting on ROI mortgages to 34%.

On a pro-forma basis, the revision is expected to reduce the Group’s transitional CET1 ratio by c.65bps, the Group’s fully loaded CET1 ratio by c.60bps and the Group’s transitional Total Capital ratio by c.85bps.

About Author

editor

editor

Related Articles

New Subscriber





Subscribe Here



Advertisements



















National Manufacturing Conference & Exhibition 2018

NIBRT Springboard Success Stories



Upcoming Events

  • No upcoming events
AEC v1.0.4