December 30, 2015 / 8:07 PM / 2 years ago

Hungary cbank asks nine banks to build additional capital buffer

BUDAPEST, Dec 30 (Reuters) - Hungary’s central National Bank of Hungary has published additional capital buffer requirements for the top nine banks effective from Jan. 1, 2017 in order to strengthen the financial system, it said on Wednesday.

The banks include OTP Bank, Italy’s Unicredit , Austria’s Raiffeisen and Erste.

“The sufficiently long preparation period ensures that market participants can smoothly meet the new requirement while also boosting their lending activity,” the central bank said on its website.

“The additional capital requirement will strengthen the stability of the domestic banking system by increasing the shock-absorption ability of the affected banks,” it said.

The bank said in had selected the banks under European Union rules which call for each member state to define its “other systemically important institutions” by January 1, 2016.

It said the additional capital buffer could amount to a maximum f 2 percent of an individual banks’ risk-weighted total exposure.

OTP is expected to build an additional 2 percent capital buffer based on current estimates, while KBC’s unit Kereskedelmi es Hitelbank and Unicredit will have to build 1 percent additional capital, the central bank said.

For the remaining six banks, the additional capital buffer would probably be 0.5 percent, it said. (Reporting by Krisztina Than; editing by Jason Neely)

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