German bank says will post its own stress test results

15th July 2011, Comments 0 comments

German regional bank Helaba said on Friday it would not boycott European banking stress tests it contests, but that it would release its own figures as well.

"Like the other banks tested, we will publish our results on our internet site at 1800 (1600 GMT)," bank spokesman Wolfgang Kuss told AFP.

The figures that Helaba plans to post include 1.92 billion euros ($2.72 billion) in so-called hybrid capital as part of its core capital, which will not be the case for the European Banking Authority that is running the tests.

The EBA could thus determine that Helaba has flunked, while the German bank makes a contrary claim.

Helaba said on Wednesday that modifications to silent participations by regional authorities, which do not give them voting rights, had not been considered in time by the EBA, putting the bank at risk of failing the test.

Taking into account the modifications would give Helaba a core capital ratio of 6.8 percent at the end of 2012.

Banks must demonstrate that they have a minimum of five percent of core capital available to resist unexpected shocks.

Helaba has been backed by the German central bank, which said Wednesday in a statement that the state-owned regional bank was "sufficiently capitalised" and met "all conditions required by the EBA several months ago to pass the stress tests."

Results of tests on 91 banks representing 65 percent of the EU banking sector are to be published later on Friday.

On Thursday, two Spanish banks said they would also pass the tests if disputed EBA criteria were not applied.

The tests are designed to combat criticism over last year's banking sector review which found that just seven out of the 91 European banks inspected were vulnerable to economic stress.

Of the 91 tested in 2010, five in Spain, one in Germany and one in Greece failed to pass but those cleared included Irish banks that subsequently collapsed, requiring Dublin to provide billions of euros in bailout funds.

© 2011 AFP

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