Spain

Stress test on banks reveals seven in need


Published

The long awaited independent stress test on Spain’s banks was published yesterday and it revealed a €59bn (£47bn; $76bn) hole. Of the 14 banks tested seven were expected to need bailout money with Bankia heading the list. Seven banks were considered to be in the positive and would not need any help and topping the list was Santander.

A Bank of Spain statement said that:

‘The 14 main Spanish banking groups (taking into account the integration processes currently under way) have participated in this test. The groups account for around 90% of the Spanish banking system’s assets.

The results confirm that the Spanish banking sector is mostly solvent and viable, even in an extremely adverse and highly unlikely macroeconomic setting:

• Seven banking groups, accounting for more than 62% of the analysed portion of the Spanish banking system’s credit portfolio, do not have additional capital needs.

• Additional capital needs have been identified for the remaining groups, on top of those existing as at 31 December 2011, that amount to €59.3 billion when the integration processes under way and deferred tax assets are not taken into account. This amount falls to €53.75 billion when the mergers under way and the tax effects are considered.’

The full report of the Oliver Wyman enquiry can be found here.

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