Spanish bank stress tests reveal €59.3 bln capital shortfall
2012-10-01 12:27:40
In an adverse economic scenario, total capital needs of the Spanish banking system are estimated to be €59.3 billion, results of a stress test conducted by management consultants Oliver Wyman showed Friday.
The capital needs estimate applies to 7 out of 14 banking groups entities on which the stress-testing exercise was conducted. BFA-Bankia, a nationalized lender, had a capital deficit of €24.7 billion, Catalunya Caixa €10.8 billion, Novagalicia €7.2 billion and Banco Popular Espanol SA €3.22 billion, among others, the stress test showed.
Seven other lenders, including Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA and Banco Sabadell SA, showed capital excesses in the adverse scenario.
The objective of the stress test was to assess the resilience of the Spanish banking system and its ability to withstand a severe adverse stress of deteriorating macroeconomic and market conditions and to estimate the capital that each individual bank would require in the event of such an adverse scenario.
The independent stress test was commissioned by the Spanish government as part of the conditions agreed in July for a European bailout of as much as €100 billion for the country's banking system.
The EU Commission and the European Central Bank have welcomed the results of the stress tests, which came a day after Spain's government unveiled a 2013 budget that stipulates €39 billion in spending cuts and tax increases
Both the 2013 budget and the results of the bank stress test are necessary steps for Spain to request sovereign aid and trigger a bond-buying program by the European Central Bank.