CRR scope of application and own funds
The scope of consolidation of the Capital Group of Bank Millennium SA as determined in accordance with the prudential regulations (Regulation CRR) is the same as the scope of consolidation made for the preparation of consolidated financial statements prepared by the Group in accordance with IAS/IFRS. The Group did not make any exclusions of consolidated entities in comparison to IFRS financial statements, based on possibility provided by article 19.1 of the CRR.
Companies of Bank Millennium Group included in consolidation as at 31.12.2016 +
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| Company | Activity domain | Head office | % of the Group’s capital share |
% of the Group’s voting share |
Recognition in financial statements |
|---|---|---|---|---|---|
| BANK MILLENNIUM SA | banking services | Warsaw | Parent company | full consolidation | |
| MILLENNIUM LEASING Sp. z o.o. | leasing services | Warsaw | 100 | 100 | full consolidation |
| MILLENNIUM DOM MAKLERSKI S.A. | brokerage services | Warsaw | 100 | 100 | full consolidation |
| MILLENNIUM TFI S.A. | investment funds management | Warsaw | 100 | 100 | full consolidation |
| MB FINANCE AB | funding companies from Millennium Group | Stockholm | 100 | 100 | full consolidation |
| MILLENNIUM SERVICE Sp. z o.o. | Rent and property management. insurance brokerage | Warsaw | 100 | 100 | full consolidation |
| MILLENNIUM GOODIE Sp. z o.o. | Internet portals activity | Warszawa | 100 | 100 | full consolidation |
| MILLENNIUM TELECOMMUNICATION SERVICES Sp. z o.o. | financial operations on equity markets, advisory services | Warsaw | 100 | 100 | full consolidation |
As at 31 December 2016 none of the Group’s companies disclosed the capital shortage in relation to existing capital requirements.
Group considers that there are no current or foreseen material or legal impediment to the prompt transfer of own funds or repayment of liabilities among parent undertaking and its subsidiaries. (Art. 436.c)
Group did not receive from competent authorities waiver from application of prudential requirements on an individual basis, based on CRR art. 7. Group did not receive a permission of competent authorities, based on CRR art. 9 (art. 436.e).
Bank Millennium Group Own Funds as at 31.12.2016 (in PLN thous.) +
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| ID | Item | Amount |
|---|---|---|
| 1 | OWN FUNDS | 6 390 664 |
| 1.1 | TIER 1 CAPITAL | 6 356 800 |
| 1.1.1 | COMMON EQUITY TIER 1 CAPITAL | 6 356 800 |
| 1.1.1.1 | Capital instruments eligible as CET1 Capital | 2 360 619 |
| 1.1.1.1.1 | Paid up capital instruments | 1 213 117 |
| 1.1.1.1.2 | Memorandum item: Capital instruments not eligible | 0 |
| 1.1.1.1.3 | Share premium | 1 147 502 |
| 1.1.1.1.4 | (-) Own CET1 instruments | 0 |
| 1.1.1.1.4.1 | (-) Direct holdings of CET1 instruments | 0 |
| 1.1.1.1.4.2 | (-) Indirect holdings of CET1 instruments | 0 |
| 1.1.1.1.4.3 | (-) Synthetic holdings of CET1 instruments | 0 |
| 1.1.1.1.5 | (-) Actual or contingent obligations to purchase own CET1 instruments | 0 |
| 1.1.1.2 | Retained earnings | 430 949 |
| 1.1.1.2.1 | Previous years retained earnings | 0 |
| 1.1.1.2.2 | Profit or loss eligible | 430 949 |
| 1.1.1.2.2.1 | Profit or loss attributable to owners of the parent | 701 252 |
| 1.1.1.2.2.2 | (-) Part of interim or year-end profit not eligible | -270 303 |
| 1.1.1.3 | Accumulated other comprehensive income | -184 962 |
| 1.1.1.4 | Other reserves | 3 835 395 |
| 1.1.1.5 | Funds for general banking risk | 228 902 |
| 1.1.1.6 | Transitional adjustments due to grandfathered CET1 Capital instruments | 0 |
| 1.1.1.7 | Minority interest given recognition in CET1 capital | 0 |
| 1.1.1.8 | Transitional adjustments due to additional minority interests | 0 |
| 1.1.1.9 | Adjustments to CET1 due to prudential filters | 130 354 |
| 1.1.1.9.1 | (-) Increases in equity resulting from securitised assets | 0 |
| 1.1.1.9.2 | Cash flow hedge reserve | 146 305 |
| 1.1.1.9.3 | Cumulative gains and losses due to changes in own credit risk on fair valued liabilities | 0 |
| 1.1.1.9.4 | Fair value gains and losses arising from the institution’s own credit risk related to derivative liabilities | 0 |
| 1.1.1.9.5 | (-) Value adjustments due to the requirements for prudent valuation | -15 951 |
| 1.1.1.10 | (-) Goodwill | 0 |
| 1.1.1.10.1 | (-) Goodwill accounted for as intangible asset | 0 |
| 1.1.1.10.2 | (-) Goodwill included in the valuation of significant investments | 0 |
| 1.1.1.10.3 | Deferred tax liabilities associated to goodwill | 0 |
| 1.1.1.11 | (-) Other intangible assets | -62 314 |
| 1.1.1.11.1 | (-) Other intangible assets gross amount | -62 314 |
| 1.1.1.11.2 | Deferred tax liabilities associated to other intangible assets | 0 |
| 1.1.1.12 | (-) Deferred tax assets that rely on future profitability and do not arise from temporary differences net of associated tax liabilities | 0 |
| 1.1.1.13 | (-) IRB shortfall of credit risk adjustments to expected losses | -474 280 |
| 1.1.1.14 | (-)Defined benefit pension fund assets | 0 |
| 1.1.1.14.1 | (-)Defined benefit pension fund assets gross amount | 0 |
| 1.1.1.14.2 | Deferred tax liabilities associated to defined benefit pension fund assets | 0 |
| 1.1.1.14.3 | Defined benefit pension fund assets which the institution has an unrestricted ability to use | 0 |
| 1.1.1.15 | (-) Reciprocal cross holdings in CET1 Capital | 0 |
| 1.1.1.16 | (-) Excess of deduction from AT1 items over AT1 Capital | 0 |
| 1.1.1.17 | (-) Qualifying holdings outside the financial sector which can alternatively be subject to a 1250% risk weight | 0 |
| 1.1.1.18 | (-) Securitisation positions which can alternatively be subject to a 1250% risk weight | 0 |
| 1.1.1.19 | (-) Free deliveries which can alternatively be subject to a 1250% risk weight | 0 |
| 1.1.1.20 | (-) Positions in a basket for which an institution cannot determine the risk weight under the IRB approach. and can alternatively be subject to a 1250% risk weight | 0 |
| 1.1.1.21 | (-) Equity exposures under an internal models approach which can alternatively be subject to a 1250% risk weight | 0 |
| 1.1.1.22 | (-) CET1 instruments of financial sector entities where the institution does not have a significant investment | 0 |
| 1.1.1.23 | (-) Deductible deferred tax assets that rely on future profitability and arise from temporary differences | 0 |
| 1.1.1.24 | (-) CET1 instruments of financial sector entities where the institution has a significant investment | 0 |
| 1.1.1.25 | (-) Amount exceeding the 17.65% threshold | 0 |
| 1.1.1.26 | Other transitional adjustments to CET1 Capital | 92 137 |
| 1.1.1.27 | (-) Additional deductions of CET1 Capital due to Article 3 CRR | 0 |
| 1.1.1.28 | CET1 capital elements or deductions – other | 0 |
| 1.1.2 | ADDITIONAL TIER 1 CAPITAL | 0 |
| 1.1.2.1 | Capital instruments eligible as AT1 Capital | 0 |
| 1.1.2.1.1 | Paid up capital instruments | 0 |
| 1.1.2.1.2* | Memorandum item: Capital instruments not eligible | 0 |
| 1.1.2.1.3 | Share premium | 0 |
| 1.1.2.1.4 | (-) Own AT1 instruments | 0 |
| 1.1.2.1.4.1 | (-) Direct holdings of AT1 instruments | 0 |
| 1.1.2.1.4.2 | (-) Indirect holdings of AT1 instruments | 0 |
| 1.1.2.1.4.3 | (-) Synthetic holdings of AT1 instruments | 0 |
| 1.1.2.1.5 | (-) Actual or contingent obligations to purchase own AT1 instruments | 0 |
| 1.1.2.2 | Transitional adjustments due to grandfathered AT1 Capital instruments | 0 |
| 1.1.2.3 | Instruments issued by subsidiaries that are given recognition in AT1 Capital | 0 |
| 1.1.2.4 | Transitional adjustments due to additional recognition in AT1 Capital of instruments issued by subsidiaries | 0 |
| 1.1.2.5 | (-) Reciprocal cross holdings in AT1 Capital | 0 |
| 1.1.2.6 | (-) AT1 instruments of financial sector entities where the institution does not have a significant investment | 0 |
| 1.1.2.7 | (-) AT1 instruments of financial sector entities where the institution has a significant investment | 0 |
| 1.1.2.8 | (-) Excess of deduction from T2 items over T2 Capital | 0 |
| 1.1.2.9 | Other transitional adjustments to AT1 Capital | 0 |
| 1.1.2.10 | Excess of deduction from AT1 items over AT1 Capital (deducted in CET1) | 0 |
| 1.1.2.11 | (-) Additional deductions of AT1 Capital due to Article 3 CRR | 0 |
| 1.1.2.12 | AT1 capital elements or deductions – other | 0 |
| 1.2 | TIER 2 CAPITAL | 33 864 |
| 1.2.1 | Capital instruments and subordinated loans eligible as T2 Capital | 128 720 |
| 1.2.1.1 | Paid up capital instruments and subordinated loans | 128 720 |
| 1.2.1.1 | Memorandum item: Capital instruments and subordinated loans not eligible | 0 |
| 1.2.1.3 | Share premium | 0 |
| 1.2.1.4 | (-) Own T2 instruments | 0 |
| 1.2.1.4.1 | (-) Direct holdings of T2 instruments | 0 |
| 1.2.1.4.2 | (-) Indirect holdings of T2 instruments | 0 |
| 1.2.1.4.3 | (-) Synthetic holdings of T2 instruments | 0 |
| 1.2.1.5 | (-) Actual or contingent obligations to purchase own T2 instruments | 0 |
| 1.2.2 | Transitional adjustments due to grandfathered T2 Capital instruments and subordinated loans | 0 |
| 1.2.3 | Instruments issued by subsidiaries that are given recognition in T2 Capital | 0 |
| 1.2.4 | Transitional adjustments due to additional recognition in T2 Capital of instruments issued by subsidiaries | 0 |
| 1.2.5 | IRB Excess of provisions over expected losses eligible | 0 |
| 1.2.6 | SA General credit risk adjustments | 0 |
| 1.2.7 | (-) Reciprocal cross holdings in T2 Capital | 0 |
| 1.2.8 | (-) T2 instruments of financial sector entities where the institution does not have a significant investment | 0 |
| 1.2.9 | (-) T2 instruments of financial sector entities where the institution has a significant investment | 0 |
| 1.2.10 | Other transitional adjustments to T2 Capital | -94 856 |
| 1.2.11 | Excess of deduction from T2 items over T2 Capital (deducted in AT1) | 0 |
| 1.2.12 | (-) Additional deductions of T2 Capital due to Article 3 CRR | 0 |
| 1.2.13 | T2 capital elements or deductions – other | 0 |
| Common Equity Tier1 Ratio (CET1) | 17.31% | |
| Total Capital Ratio (TCR) | 17.40% |
Reconciliation of items of own funds and equity reported in the Yearly Financial Report (in PLN thous.) +
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| Item | Note of financial report |
Value in financial report | Item in Table No. 5 |
|---|---|---|---|
| Subordinated liabilities | 34 | 664 004 | 1.2.1.1 |
| Share capital | 35a | 1 213 117 | 1.1.1.1.1 |
| Capital from sale of shares over nominal value | List of equity items page 10 | 1 147 502 | 1.1.1.1.3 |
| Revaluation capital | 35b | -184 962 | 1.1.1.3 |
| Retained earnings | 35c | 4 765 548 | 1.1.1.4
1.1.1.5 1.1.1.2.2.1 |
| Total equity and subordinated liabilities reported in the audited financial report | 7 605 209 | ||
| Part of net result. which cannot be included in own funds as of reporting date for purposes of calculation of prudential standards | -270 303 | 1.1.1.2.2.2 | |
| Gross amount of other intangible assets | -62 314 | 1.1.1.11.1 | |
| Shortage of credit risk corrections in view of expected losses according to IRB approach | -474 280 | 1.1.1.13 | |
| Correction by 40% of unrealised gains | -2 719 | 1.1.1.26 oraz 1.2.10 | |
| Korekty wartości z tytułu wymogów w zakresie ostrożnej wyceny | -15 951 | 1.1.1.9.5 | |
| Correction by part of principal of subordinated liability. which cannot be included in own funds | -534 880 | 1.2.1.1 | |
| Correction by interest accrued on subordinated liability | -403 | 1.2.1.1 | |
| Provision for instruments hedging cash flows | 146 305 | 1.1.1.9.2 | |
| Total own funds | 6 390 664 | 1 | |
Items non deducted from own funds
As at 31 December 2016 the Group did not make significant investments in financial sector entities, as mentioned in article 43 CRR.
In case of deferred tax assets, mentioned in article 38 CRR, their value constitutes 4.4% of adjusted Tier I and in consequence it is exempted from deductions in keeping with article 48 CRR. At the same time this amount was assigned a risk weight of 250% for purposes of calculation of capital requirements.
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