Regulatory Alerts2016-01-22
Computability of Period or Year-End Profits in Tier 1 Core Capital
The Bank of Italy issues operational guidelines for significant banks and investment firms (SIM) to verify the inclusion of period or year-end profits in Tier 1 Core Capital (CET1) under Article 26(2) of the CRR. The document specifies that external auditors must provide either a full audit report, a provisional comfort letter for year-end profits, or a limited review report for period profits, ensuring all foreseeable costs and dividends are deducted. These verification procedures must be communicated to intermediaries before the submission of supervisory reporting deadlines set by Regulation (EU) No 680/2014.
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