Regulatory Alerts2024-08-09
Reinstatement of the Capital Conservation Buffer and Phase-Out of Unaudited Profits
The Bank of Namibia has issued Circular BIA 1/5 to reinstate the mandatory 2.5 percent Capital Conservation Buffer and phase out unaudited interim profits for Domestic Systemically Important Banks (DSIBs). The directive imposes tiered distribution constraints on dividends, share buybacks, and discretionary bonuses based on Common Equity Tier 1 ratios, requiring banks to conserve up to 100 percent of earnings when capital falls below the 8.5 percent threshold. Effective 30 September 2024, the framework restricts excessive earnings distributions to ensure buffer replenishment and enhance sector resilience against economic downturns.
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