Inclusion of interim profits in CET1

Where an institution, having received permission from its competent authority, includes verified interim profits in its calculation of Common Equity Tier 1 (CET1) capital pursuant to Article 26(2) of Regulation (EU) No 575/2013 (CRR), the amended CET1 amount is the amount to be considered for subsequent periods. To the extent that an institution chooses not to have the interim profits (or year-end profits) of the following period verified in accordance with Article 26(2) of the CRR, the institution will not able to include any positive differences in CET1. In contrast, any interim losses that were to occur subsequent to verification would nevertheless have to be deducted as they arise pursuant to Article 13(1) of the Commission Delegated Regulation (EU) No 241/2014. Following the example above, the previously verified and approved interim profits per its calculation of 30 June will still form part of CET1 capital on 30 September. However, any positive differences in interim profits as of 30 September (compared to 30 June), to the extent that they are unverified, would however have to be disregarded, whereas negative differences as of 30 September (again compared to 30 June), will have to be deducted as they arise. Furthermore, the calculation of positive or negative differences in interim profits should take account of any foreseeable charges and dividends. See Q&A 384 for further information.