Leverage Ratio
The leverage ratio (LR) is a regulatory measure (not risk-based) complementing capital designed to guarantee the soundness and financial strength of institutions in terms of indebtedness.
In January 2014, the Basel Committee on Banking Supervision published the final version of the “Basel III leverage ratio framework and disclosure requirements”, which has been included through a delegated act that amends the definition of leverage ratio in the CRR regulation.
Pursuant to Article 451, section 2 of the CRR, on June 15, 2015 the EBA published the final draft of the Implementing Technical Standard (ITS) on disclosures of the Leverage Ratio for breaking down the leverage ratio, which has been applied in this report.
The leverage ratio is defined as the quotient of eligible Tier 1 bank capital and exposure.
The table below shows a breakdown of the items making up the leverage ratio as of December 31, 2019 and December 31, 2018:
LRSum - Summary of the reconciliation of accounting assets and exposure corresponding to the Leverage Ratio
Million Euros
| Summary table of accounting assets and leverage ratio exposure conciliation | 12-31-2019 Phased-in |
12-31-2019 Fully Loaded |
12-31-2018 Phased-in |
12-31-2018 Fully Loaded |
|---|---|---|---|---|
| a) Total assets as published financial statements | 698,690 | 698,690 | 676,689 | 676,689 |
| b) Adjustment for entities which are consolidated for accounting purposes but are outside the scope of regulatory consolidation | (21,636) | (21,636) | (19,570) | (19,570) |
| (Adjustment for fiduciary assets recognised on the balance sheet pursuant to the operative accounting framework but excluded from the leverage ratio exposure measure in accordance with Article 429 (13) of Regulation (EU) No 575/2013) | - | - | - | - |
| c) Adjustments for derivative financial instruments | (7,124) | (7,124) | (7,410) | (7,410) |
| d) Adjustments for securities financing transactions "SFTs" | 1,840 | 1,840 | 3,193 | 3,193 |
| e) Adjustment for off-balance sheet items (1) | 67,165 | 67,165 | 61,409 | 61,409 |
| f) (Adjustments for intragroup exposures excluded from the leverage ratio exposure measure in accordance with Article 429 (14) of Regulation (EU) No 575/2013) | - | - | - | - |
| g) Other adjustments | (7,847) | (8,656) | (9,012) | (10,080) |
| Leverage ratio total exposure measure | 731,087 | 730,279 | 705,299 | 704,231 |
| h) Capital Tier 1 | 49,701 | 48,775 | 45,947 | 45,047 |
| Leverage ratio total exposure measure | 731,087 | 730,279 | 705,229 | 704,231 |
| Leverage ratio | 6.80% | 6.68% | 6.51% | 6.40% |
This corresponds to off-balance sheet exposure after application of the conversion factors obtained in accordance with Article 429, paragraph 7 of the CRR
As can be seen, the Group maintains a phased leverage ratio of 6.80% and a fully loaded ratio of 6.68%, well above the minimum level required.