Regulatory Alerts2015-04-20
Added · Updated
Circular on Conditions for Including Interim or Year-End Profits in CET1 Capital
The Malta Financial Services Authority requires Other Institutions to obtain prior permission before including interim or year-end profits in Common Equity Tier 1 capital, subject to verification by independent auditors and the deduction of foreseeable charges or dividends. Permission is granted if the Authority receives specific documentation, including an external auditor's document and a declaration signed by the Board of Directors detailing profit components and dividend deductions. The circular specifies that dividends to be deducted are those formally proposed or decided by the Board, or alternatively the highest of amounts calculated via internal policy, a three-year average pay-out ratio, or the previous year's ratio. These conditions apply from the reporting reference date of 31 December 2014 and supersede previous notifications issued by the Authority.
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