European Central Bank 4 February 2015, Decision (EU) 2015/656 of the European Central Bank of 4 February 2015 on the conditions under which credit institutions are permitted to include interim or year-end profits in Common Equity Tier 1 capital in accordance with Article 26(2) of Regulation (EU) No 575/2013 (ECB/2015/4)

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Decision (EU) 2015/656 (ECB/2015/4) of the European Central Bank, adopted on 4 February 2015, establishes the conditions under which credit institutions under ECB direct supervision may include interim or year-end profits in Common Equity Tier 1 (CET1) capital pursuant to Article 26(2) of Regulation (EU) No 575/2013, requiring both independent auditor verification and documented deduction of all foreseeable charges and dividends. The Decision specifies that dividend deductions must reflect the highest of: the formally proposed or decided dividend, the maximum dividend under internal policy, the average pay-out ratio over the last three years, or the previous year's pay-out ratio, where no formal proposal or decision exists. Credit institutions must submit prescribed documentation, including an external auditor's report and a signed declaration using the model letter in the Annex, prior to the applicable supervisory reporting remittance date, with the ECB retaining individual assessment authority for cases falling outside the Decision's scope.AI