The prudential capital of Triodos Bank consists of Common Equity Tier 1 (CET-1) and subordinated debt capital (Tier 2).

The bank’s Total Capital Ratio (TCR) increased from 18.8% in December 2020 to 21.3% in December 2021. This significant increase of the TCR in 2021 was primarily driven by a slight increase of CET-1, by EUR 41 million in 2021, and the issuance of EUR 250 million eligible Tier 2 capital in November 2021.

The minimum Total Capital Ratio for Triodos Bank is 13.0% in 2021 based on the overall capital requirements.

The CET-1 capital increased by 4% over the last 12 months to EUR 1.1 billion per end of December 2021 (2020: EUR 1.1 billion). This increase in 2021 was mainly driven by retained earnings after the AGM profit resolution in May 2021. Triodos Bank’s mid-term strategy aims for a CET-1 ratio of at least 15.5% in the current regulatory context.

Tier 2 capital increased by EUR 249 million over the last 12 months to EUR 255 million per end of December 2021 (2020: EUR 6 million). This was primarily attributable to the bank’s successful issue in November 2021 of a EUR 250 million subordinated green bond that qualifies as eligible Tier 2 capital.

The bank’s overall liquidity position remains robust with an LCR of 229% per end of December 2021 (2020: 232%). The regulatory minimum LCR is 100%.

Triodos Bank will continue to work on improving its profitability while maintaining a solid equity base, capital ratios and a substantial liquidity surplus. The bank recognises that this risk-averse strategy imposes some constraints on its return on equity.