Goldmans warns 50 top banks will fail new stress tests

At least 50 of Europe’s top 91 banks are expected to fail the European Banking Authority’s (EBA) new stress tests, analysts at Goldman Sachs have warned.

The Continent’s weakest banks could be facing a shortfall of as much as £260bn if the EBA forces lenders to raise their capital buffers to 9% of their total loan book, the Financial Mail reports.

The watchdog is currently re-working its widely criticised examination of the region’s banking system conducted in July, which awarded a pass mark to all but eight of Europe’s major lenders.

Dexia was one of the institutions to come through the tests but it had to be bailed out last week.

Goldman Sachs’ warning came as finance ministers from the world’s 20 leading economies gathered for talks over the weekend, with the fate of the Eurozone at the top of the agenda. The aim of the summit is to prepare for a meeting of global leaders in Cannes early next month.

According to Goldman Sachs Global Investment Research data the 50 banks under threat on a 7% Core Tier 1 ratio are:

 

Scenario: GIIPS          
CT1 Ratio under GIIPS, capital shortfall versus threshold     CT1 Ratio   Shortfall
Name Shortfall & RWAs GIIPS loss €bn (pre-tax) Pro-forma Threshold Total €bn
TT Hellenic Bank -64.30% -4.11 -55% 10% -4.4
AGB -61.50% -6.45 -52% 10% -7.6
EFG Eurobank -24.50% -9.8 -15% 10% -12.1
Piraeus Bank -23.40% -7.53 -14% 10% -9.2
NBG -20.50% -13.49 -11% 10% -14.8
Alpha Bank -16.80% -7.39 -7% 10% -8.4
Marfin Popular Bank -16.70% -3.59 -7% 10% -4.8
Bank of Cyprus -12.60% -2.48 -3% 10% -3.3
Banco BPI -8.50% -2.09 1% 10% -2.3
BCP -8.00% -3.42 2% 10% -5.5
Espirito Santo FG -5.70% -1.28 4% 10% -4.4
CGdD -5.60% -2.7 4% 10% -4.5
Banco Pastor -5.30% -0.53 1% 7% -1
CAM -5.10% -1.13 1% 7% -2.5
Unnim -4.10% -0.52 2% 7% -0.7
Grupo Caja -3.041 -0.31 2% 7% -0.6
Bank Of Ireland -3.90% -1.33 6% 10% -2.4
Duero-España -3.40% -1.52 3% 7% -0.9
HRE -3.30% -2.32 3% 7% -0.8
Caixa -3.10% -7.09 3% 7% -5.5
BMPS -3.00% -6.55 4% 7% -3.4
Bankia -2.80% -5.11 4% 7% -6
Banco Popular -2.70% -2.07 4% 7% -2.6
Sabadell -2.60% -1.51 4% 7% -1.5
Bankinter -2.50% -0.57 4% 7% -0.8
CatalunyaCaixa -2.40% -0.57 4% 7% -1.2
Volksbank -2.30% -0.14 4% 7% -0.8
Banca Civica -2.30% -0.95 4% 7% -1.1
Caja Pollensa -2.30% -0.01 4% 7% 0
NovaCaixaGalicia -2.20% -0.85 4% 7% -1.2
Banco Popolare -1.90% -2.4 5% 7% -1.8
Ibercaja -1.70% -0.66 5% 7% -0.4
HSH Nordbank -1.70% -0.59 5% 7% -1.2
Banco Mare Nostrum -1.70% -0.76 5% 7% -0.7
Commerzbank -1.50% -5.05 5% 7% -4.5
Nord LB -1.40% -0.7 5% 7% -1.5
NLB -1.40% -0.05 5% 7% -0.2
WestLB -1.20% -0.72 5% 7% -0.8
DZ Bank -1.10% -2.48 5% 7% -1.4
WGZ Bank -1.10% -0.98 5% 7% -0.2
Banco Base -1.10% -0.61 5% 7% -0.3
Caja de Ontinyent -1.00% 0 5% 7% 0
Unicredit -0.70% -10.37 6% 7% -3.5
Societe Generale -0.60% -3.4 6% 7% -2.7
UBI Banca -0.50% -2.04 6% 7% -0.5
RBS -0.50% -2.16 6% 7% -3.1
Deutsche Bank -0.40% -3.03 6% 7% -2.2
SNS Bank -0.40% -0.25 6% 7% -0.1
HeLaBa -0.20% -0.45 6% 7% -0.2
BPCE -0.10% -1.91 6% 7% -0.3

 

However, increasing the CT1 Ratio to 8% adds the following names to the list:

LBBW -0.90% -0.73 7% 8% -1.1
BNP Paribas -0.80% -10.41 7% 8% -5.8
Intesa Sanpaolo -0.70% -12.25 7% 8% -2.6
Dexia -0.70% -6.45 7% 8% -1
Bayern LB -0.60% -0.33 7% 8% -0.8
Barclays -0.40% -2.39 7% 8% -3
Unicaja -0.40% -0.66 7% 8% -0.1
BBVA -0.30% -11.81 7% 8% -0.8
Santander -0.20% -9.96 7% 8% -1.5
Grupo BBK -0.20% -0.63 7% 8% -0.1
Caja Vital Kutxa -0.20% -0.12 7% 8% 0

Increasing the CT1 Ratio to 9% adds the following names to the list:

Credit Agricole -0.90% -6.02 8% 9% -5.2
Lloyds -0.80% -0.02 8% 9% -4.1
Raiffeisen -0.80% -0.1 8% 9% -0.8
Erste Bank -0.70% -0.47 8% 9% -0.9
NKBM -0.50% 0 8% 9% 0
ING Bank -0.30% -2.25 8% 9% -1.1
HSBC -0.20% -1.99 8% 9% -2.1

 

Finally, taking the CT1 Ratio to 10% adds these names.

SHB -0.90% 0 9% 10% -0.9
Kuxta -0.90% -0.3 9% 10% -0.1
DekaBank -0.60% -0.15 9% 10% -0.2
KBC -0.50% -1.83 9% 10% -0.7
DnB NOR -0.50%   9% 10% -0.6
ABN Amro -0.50% -0.33 9% 10% -0.6
Nykredit -0.20% -0.02 9% 10% -0.1
Swedbank -0.10% 0 9% 10% -0.1

 

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