BDO braces for Basel III
(26 March 2012 – Philippines) The Philippines’ largest bank, Banco de Oro Unibank (BDO), intends to raise at least US$200 million (A$190 million) in Tier 1 Capital this year.
The bank is to comply with the far stricter global capital adequacy requirements under Basel III and the bank, however, is still waiting for the appropriate time to do so, said President Nestor Tan.
He said the US$200 million figure was not final and the exact amount depends on changes in the Basel III regulatory requirements and the expectation of loan growth BDO will match with an increase in funding.
Universal and commercial banks are required to adopt Basel III by Jan. 1, 2014. Basel III strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage.
Basel III requires banks to hold 4.5 percent of common equity (up from 2 percent in Basel II) and 6 percent of Tier I capital (up from 4 percent in Basel II) of risk-weighted assets.
In 2011, BDO’s capital adequacy to risk assets ratio improved to 15.8 percent from 13.8 percent year-on-year.
With assets of US$23 billion, BDO is the Philippines’ largest bank.
He said the US$200 million figure was not final and the exact amount depends on changes in the Basel III regulatory requirements and the expectation of loan growth BDO will match with an increase in funding.
Universal and commercial banks are required to adopt Basel III by Jan. 1, 2014. Basel III strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage.
Basel III requires banks to hold 4.5 percent of common equity (up from 2 percent in Basel II) and 6 percent of Tier I capital (up from 4 percent in Basel II) of risk-weighted assets.
In 2011, BDO’s capital adequacy to risk assets ratio improved to 15.8 percent from 13.8 percent year-on-year.
With assets of US$23 billion, BDO is the Philippines’ largest bank.
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