2014 EU-wide Stress Test Summary for LU - Precision Capital S.A.
Core Information
Institution: LU - Precision Capital S.A. (Holding of Banque Internationale à Luxembourg and KBL European Private Bankers S.A.)
LEI Code: 549300AUUQG072ATL746
Reported Date: 31 December 2013
Summary of Key Metrics
Actual Figures (as of 31 December 2013)
Operating profit before impairments: 232 min EUR
Impairment losses on financial and non-financial assets in the banking book: 63 min EUR
Common Equity Tier 1 (CET1) capital: 1,214 min EUR
Total Risk Exposure: 8,662 min EUR
CET1 ratio: 14.0%
Baseline Scenario (as of 31 December 2016)
3-year cumulative operating profit before impairments: 113 min EUR
3-year cumulative impairment losses on financial and non-financial assets in the banking book: 66 min EUR
3-year cumulative losses from the stress in the trading book: 46 min EUR
CET1 capital: 1,237 min EUR
Total Risk Exposure: 9,902 min EUR
CET1 ratio: 12.5%
Adverse Scenario (as of 31 December 2016)
3-year cumulative operating profit before impairments: -61 min EUR
3-year cumulative impairment losses on financial and non-financial assets in the banking book: 126 min EUR
3-year cumulative losses from the stress in the trading book: 66 min EUR
Valuation losses due to sovereign shock after tax and prudential filters: 74 min EUR
CET1 capital: 891 min EUR
Total Risk Exposure: 10,739 min EUR
CET1 ratio: 8.3%
Memorandum Items
Common EU-wide CET1 Threshold (5.5%): 591 min EUR
Total amount of instruments with mandatory conversion into ordinary shares (cumulative conversions, 2014-2016): 0 min EUR
Total Additional Tier 1 and Tier 2 instruments eligible as regulatory capital (under CRR provisions): 150 min EUR
Of which: eligible instruments with trigger above CET1 ratio in adverse scenario: 0 min EUR
Risk Exposure Analysis
Baseline Scenario
Category
Exposure Values (2014)
Exposure Values (2015)
Exposure Values (2016)
F-IRB
8,229 min EUR
1,105 min EUR
4,439 min EUR
A-IRB
2,338 min EUR
1,853 min EUR
1,73 min EUR
STA
17,014 min EUR
5,939 min EUR
4,439 min EUR
Adverse Scenario
Category
Exposure Values (2014)
Exposure Values (2015)
Exposure Values (2016)
F-IRB
10,809 min EUR
4,439 min EUR
10,739 min EUR
A-IRB
2,338 min EUR
1,853 min EUR
1,853 min EUR
STA
17,014 min EUR
5,939 min EUR
10,739 min EUR
Impairment and Provisions Data
Baseline Scenario
Year
Impairment Rate
Stock of Provisions
Coverage Ratio - Default Stock
2014
0.01%
1
42.72%
2015
0.01%
1
41.30%
2016
0.01%
2
40.82%
Adverse Scenario
Year
Impairment Rate
Stock of Provisions
Coverage Ratio - Default Stock
2014
0.01%
4
49.03%
2015
0.01%
4
49.03%
2016
0.01%
4
49.03%
Summary of Key Findings
The bank's CET1 ratio decreased from 14.0% in 2013 to 8.3% under the adverse scenario by 2016, indicating a significant deterioration in capital adequacy.
Under the baseline scenario, the CET1 ratio slightly decreased to 12.5% by 2016, showing a more moderate decline compared to the adverse scenario.
The adverse scenario led to a cumulative loss of 126 min EUR in impairment losses, which is significantly higher than the baseline scenario's 66 min EUR.
The 3-year cumulative operating profit before impairments was negative (-61 min EUR) in the adverse scenario, whereas it was positive (113 min EUR) in the baseline scenario.
The total risk exposure increased under the adverse scenario, from 8,662 min EUR in 2013 to 10,739 min EUR in 2016.
The CET1 capital decreased from 1,214 min EUR to 891 min EUR in the adverse scenario, which is a notable reduction in capital.
The bank did not have any instruments with mandatory conversion into ordinary shares during the 2014-2016 period, and all Additional Tier 1 and Tier 2 instruments were not triggered in the adverse scenario.
