Sunday, October 26, 2014

ECB stress tests: Three out of four Greek banks fail

Financial Times
October 26, 2014

Three out of the four participating Greek banks failed to pass the European Central Bank’s Comprehensive Assessment on Sunday but the picture is completely reversed when the banks’ approved restructuring plans are taken into account in the dynamic balance sheet assumption.

The aggregate capital shortfall for Eurobank, National Bank and Piraeus Bank amounted to about €8.7bn at the end of 2013 with just Alpha Bank exhibiting a capital surplus. Piraeus featured the smallest capital deficit with €660m at end-2013.

But the Comprehensive Assessment, which included capital accretive measures and projected future earnings in the banks’ restructuring plans approved by the European Commission in 2014, showed three banks met the capital requirement while the fourth, Eurobank, just missed it for 5 basis points with an adjusted CET I ratio of 5.45 per cent under the adverse, dynamic scenario.

“We are pleased with the results of the Comprehensive Assessment under the dynamic balance sheet projections as taken into account net capital already raised, our bank has practically no capital shortfall,” said Christos Megalou, chief executive of Eurobank.


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