Regulatory Alerts2025-06-30
D3-2025 Leverage Buffer Requirements for Domestic Systemically Important Banks
The Prudential Authority has issued Directive D3-2025 requiring South African banks and controlling companies designated as domestic systemically important banks (D-SIBs) to maintain a minimum leverage ratio buffer equal to 50% of their higher loss-absorbency requirement. This buffer, which must be fully met by Tier 1 capital and reserve funds, operates alongside the existing 4% minimum leverage ratio and triggers automatic capital distribution constraints based on a tiered CET1-to-leverage ratio framework. The directive takes effect on 1 July 2025, reinforcing the resilience of the local banking system by extending global Basel III leverage buffer standards to domestic institutions.
Share