UniCredit Secures ECB Approval for Insurance Holdings Treatment

UniCredit has received European Central Bank (ECB) approval to change how its insurance holdings are treated for regulatory capital, resulting in a 52-basis-point improvement in its core capital ratio.

The Italian lender announced the approval on September 8 and will apply the treatment, known as the Danish Compromise, from its third-quarter reporting.

Under this new treatment, insurance investments can be risk-weighted rather than deducted from regulatory capital. UniCredit estimated the expected benefit using its position at the end of the second quarter, which translates to an improvement of 0.52 percentage points in its core capital ratio.

The decision fulfils UniCredit's stated intention to obtain approval by the end of September and removes a supervisory condition from a benefit already included in its financial planning. It does not represent an injection of new cash into the group.