Of Special Interest


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2nd October 2012

Spanish Bank stress test detail

The independently calculated stress test of Spanish Banks concluded that under the adverse scenario banks would require €59.3bn (£47.3bn $76.7bn ¥5,948bn Y481.9bn). When a number of mergers in progress are completed this figure drops to €53.7bn (See table below).

The independent stress test was carried out by Oliver Wyman. Markets were relieved as the figure was in line with recent estimates and lower than had been feared might be the case earlier in the year. Before focusing on the problem areas it is worth noting that seven banking groups have a combined surplus €45.8bn under the adverse scenario. The adverse scenario is in some respects extreme, however if the Spanish economy cannot be turned around to show some growth, or at the very least a lower rate of contraction then the problems for Spanish banks could continue to multiply even beyond this point.

Banco Popular announced that its board had approved a capital increase of €2.5bn- See separate article [Popular believes can boost profits stay independent ].

Banco de Valencia and Catalunyabank were known beforehand to require more capital. The amount of capital required by Catalunyabank may surprise some however. Bankia, accounts for 46% of the sector's capital needs under the central bank's table of requirements following mergers.

The failure of the central bank and regulators to realise the extent of Bankia's problems in advance was the main item that shook investors and other governments faith in the Spanish banking system. Bankia issued a combative statement apparently arguing the methodology believing it would have to borrow no more than €19bn - see separate article [Bankia to seek further 19bn Euro state aid ].

Spanish Banks Baseline Adverse
€m €m
Grupo Santander + 19,181 + 25,297
BBVA + 10,945 + 11,183
Caixabank+Cívica + 9,421 + 5,720
Kutxabank + 3,132 + 2,188
Sabadell+CAM + 3,321 + 915
Bankinter + 393 + 399
Unicaja+CEISS + 1,300 + 128
Surplus + 47,693 + 45,830

Ibercaja+Caja3+Liberbank + 492 - 2,108
BMN - 368 - 2,208
Popular + 677 - 3,223
Banco de Valencia - 1,846 - 3,462
NCG Banco - 3,966 - 7,176
Catalunyabank - 6,488 - 10,825
Bankia-BFA - 13,230 - 24,743
- 24,731 - 53,745

1 + figure represents surplus capital. - figure represents shortfall

2 This table shows the calculation after a number of mergers in process are completed. The adverse shortfall under the current structure is €59.3bn

3 €1bn=£798m - $1,293m - ¥100.3bn - Y8,126m

4 Source for table is Banco de España