Prudential requirements and ratios

The Lithuanian Central Credit Union is subject to the following prudential requirements:

• Own funds requirements – banks must satisfy the following own funds requirements:
  • a Tier 1 equity capital ratio of 4.5 per cent;
  • a Tier 1 capital adequacy ratio of 6 per cent;
  • a total capital adequacy ratio of 8 per cent.
• Liquidity requirements – the value of the liquidity coverage ratio (LCR) must not be less than 100 per cent.
• Maximum exposure for a single borrower ratio – the amount of loans to a single borrower, considering the impact of credit risk mitigation measures, must not be above 25 per cent of the Lithuanian Central Credit Union’s eligible capital. When the client is an institution (bank or investment company) or when a group of connected clients includes one or several institutions, that value must not be above 25 per cent of the institution’s eligible capital, or EUR 150 million (taking into account which of the values is larger).

The Bank of Lithuania may set other ratios without contradiction to the recommendations of the Basel Committee on Banking Supervision and European Union directives.