Africa-Press – Cape verde. Cape Verde maintains the same four banks with a “systemic importance” classification, subject to the creation of a conservation reserve to absorb any impacts, according to their importance, the regulator announced this Thursday.
Caixa Económica de Cabo Verde (CECV) and Banco Comercial do Atlântico (BCA, Caixa Geral de Depósitos group) remain, in this order, as the two banks of “high systemic importance”, according to the assessment updated today by Banco de Cabo Verde (BCV).
Next come Banco Cabo-verdiano de Negócios (BCN) and Banco Interatlântico (also part of the CGD group), remaining as banks of “slight importance”.
The Angolan Investment Bank (BAI), the International Investment Bank (IIB) and Ecobank were classified as “without systemic importance”.
However, BAI “appears for the first time, after the inaugural classification in 2024”, with a score that classifies it as a bank of “slight systemic importance”.
The age group reclassification will only happen if “for two consecutive years the average score is maintained between 95 and 150 points”, according to the criteria defined by the BCV.
According to regulations published in 2024, the central bank will disclose by May 31 of each year the credit institutions classified as ‘domestic systemically important banks’ (D-SIBs).
The ranking is calculated using data as of December 31 of the previous year, based on four indicators: size (35%), interconnectivity (20%), substitutability (35%) and domestic sentiment (10%).
In this update, Caixa Econômica Federal was classified with 297.85 points (previously it received 284.88 points) and BCA with 260.46 (it had 265.11 a year ago), surpassing the 200 points from which institutions are considered “domestic banks of high systemic importance”.
Entities between 150 and 200 points are “domestic banks of moderate systemic importance”, but there are none in this range, followed by the group of 95 to 150 points, “domestic banks of slight systemic importance”, which includes BCN with 127.43 points (117.38 previously) and Interatlântico with 97.76 (96.68 points a year ago).
Banks below 95 points are considered to be of no systemic importance, such as IIB (up from 87.54 to 92.02 points) and Ecobank (down from 57.41 to 56.13 points).
BAI rose this year from 87.95 to 97.74 points and, if it returns to above 95 points next year, it will be classified among the “domestic banks of slight systemic importance”.
The BCV, like other global jurisdictions, introduced with this assessment a capital conservation buffer in order to ensure that banks accumulate, during periods of economic growth, a sufficient equity base to absorb losses in periods of stress.
All domestic banks identified as D-SlBs are subject to the creation of a conservation reserve based on the classification obtained.
This type of measure was especially promoted, at a global level, after the 2007-2009 financial crisis to prevent difficulties in large institutions with significant influence on the markets – what is called systemic importance.
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