Article 7a Multiple distributions constituting a disproportionate drag on own funds

Distributions on Common Equity Tier 1 instruments referred to in Article 28 of Regulation (EU) No 575/2013 shall be deemed not to constitute a disproportionate drag on capital where all of the following conditions are met:

1. (a)

   the dividend multiple is a multiple of the distribution paid on the voting instruments and not a predetermined fixed amount;

2. (b)

   the dividend multiple is set contractually or under the statutes of the institution;

3. (c)

   the dividend multiple is not revisable;

4. (d)

   the same dividend multiple applies to all instruments with a dividend multiple;

5. (e)

   the amount of the distribution on one instrument with a dividend multiple does not represent more than 125 % of the amount of the distribution on one voting Common Equity Tier 1 instrument.

   In formulaic form this shall be expressed as:

   

   where:

   1. k shall represent the amount of the distribution on one instrument without a dividend multiple;

   2. l shall represent the amount of the distribution on one instrument with a dividend multiple;

6. (f)

   the total amount of the distributions paid on all Common Equity Tier 1 instruments during a one year period does not exceed 105 % of the amount that would have been paid if instruments with fewer or no voting rights received the same distributions as voting instruments.

   In formulaic form this shall be expressed as:

   

   where:

   1. k shall represent the amount of the distribution on one instrument without a dividend multiple;

   2. l shall represent the amount of the distribution on one instrument with a dividend multiple;

   3. X shall represent the number of voting instruments;

   4. Y shall represent the number of non-voting instruments.

   The formula shall be applied on a one-year basis.

Where the condition of point (f) of paragraph 1 is not met, only the amount of the instruments with a dividend multiple that exceeds the threshold defined therein shall be deemed to cause a disproportionate drag on capital.

Where any of the conditions of points (a) to (e) of paragraph 1 are not met, all outstanding instruments with a dividend multiple shall be deemed to cause a disproportionate drag on capital.