In June 2019, the FSC designated CTBC Bank, Cathay United Bank, Taipei Fubon Bank, Mega International Commercial Bank and Taiwan Cooperative Bank as D-SIBs.
The FSC (Financial Supervisory Commission) has named First Commercial Bank as a D-SIB, making it the sixth bank in Taiwan to receive the designation.
When assessing whether banks should be classified as D-SIBs, the FSC reviews their market cap, interconnectedness with peers, substitutability with peers in relation to functions and services, and the complexity of operations, in line with standards set by the BCBS (Basel Committee on Banking Supervision).
In June 2019, the FSC designated CTBC Bank, Cathay United Bank, Taipei Fubon Bank, Mega International Commercial Bank and Taiwan Cooperative Bank as D-SIBs due to their importance to the banking system.
The FSC did not designate First Commercial Bank as a D-SIB in 2019, as its performance in 2017 did not meet the criteria. The regulator reviews two years of a bank’s data when evaluating it for the D-SIB designation.
Banks designated as D-SIBs are required to maintain a minimum CET1 ratio of 11 percent, a minimum tier-1 capital ratio of 12.5 percent, and at least 14.5 percent in total capital adequacy ratio – which is 4 percentage points higher than the requirements for regular banks.
First Commercial Bank’s CET1 ratio stood at 10.67 percent as of end-September, its tier-1 capital ratio at 11.22 percent, and its total capital adequacy ratio at 13.17 percent.
Among all D-SIBs, only Cathay United Bank met the three requirements.
Additional reporting from Taipei Times.