The Central Bank of Cyprus announced that it has designated six credit institutions as Other Systemically Important Institutions (O-SII institutions), along with the corresponding capital buffer rate each must meet.
In the context of the annual review of the definition of credit institutions that fall under the definition of O-SII institutions, completed on May 7, the CBC designated Bank of Cyprus Public Company Ltd, Hellenic Bank Public Company Ltd, RCB Bank Ltd, Astrobank Ltd and Alpha Bank Cyprus Ltd as O-SII. The measure will take effect from 1 January 2021.
As per the CBC announcement of 10 April 2020, with this measure, it was also decided to defer the phasing-in schedule for the gradual build-up of this buffer by 12 months, thus releasing on 1 January 2021 approximately €90 million of capital from the banking system, aiming to further assist corporations and households to deal with the economic consequences of the COVID-19 pandemic and to safeguard the stability of the financial system.
The demand for O-SII capital buffer that comes into force on 1 January 2021 is 1% for Bank of Cyprus, 0.75% for Hellenic Bank, 0.5% for Eurobank Cyprus and RCB Bank and 0,25% for Astrobank and Alpha Bank Cyprus.