On 28 May 2019, the Group of ING Bank Śląski S.A. received a positive administrative decision of the Polish Financial Supervision Authority (PFSA) with respect to the update of the Recovery Plan. The Bank Guarantee Fund was also involved in the process of issuing this decision by the PFSA as an opinion maker. The Recovery Plan complies with the Polish law transposing the requirements of the BRR Directive, i.e. the Act on the Bank Guarantee Fund of 10 June 2016 and the secondary legislation under the Act.
In parallel to the Bank's efforts on the Recovery Plan, the Bank Guarantee Fund, pursuant to its responsibilities referred to in the Act, is obliged to prepare, update and assess the feasibility of Forced Restructuring Plans for domestic entities. The Bank Guarantee Fund in its letter of 29 January 2020 sustained for ING Bank Śląski S.A. the restructuring strategy in the form of debt write-offs and conversions (Eng. (“bail-in tool”) to cover the incurred losses and to recapitalise the Bank and to restore market confidence in the Bank in respect to its potential to pay its debt. The Bank Guarantee Fund set an MREL requirement for the Bank and it was obliged to comply with it effective from 31 December 2022.
The Bank Guarantee Fund set the MREL requirement for the Bank at the level of 21.28% of risk-weighted assets (11.679% of total equity and liabilities). The MREL requirement, according to the current Bank Guarantee Fund methodology for bail-in strategies for risk-weighted assets, can be estimated using the following formula:
(CRRTCR + BFX + OSII) + [1 – (CRRTCR + BFX + OSII)] * (CRRTCR + BFX + OSII + BZ + BRS + BA)
- CRRTCR – The minimum required by CRR with respect to the total capital ratio,
- BFX – Pillar 2 or add-on for exposures under FX mortgage loans,
- OSII – Buffer of another systemically-important institution,
- BZ – Capital conservation buffer,
- BRS – Systemic risk buffer,
- BA – Countercyclical buffer.
The restructuring strategy and the MREL requirement may be changed, in particular as a result of work in supervisory bodies, including in connection with common supervisory decisions as well as the implementation of the Banking Packet (CRR2, BRRD2 and CRD V).