FRANKFURT (MNI) – All of Germany’s Landesbanks have passed the
European bank stress tests, German daily Frankfurter Allgemeine Zeitung
reported Thursday evening, citing “information obtained” by its
reporters.
The Landesbanks, owned by Germany’s states, had been perceived as
the weakest link in the German banking system. Some — including Bayern
LB, Landesbank Baden-Wuerttemberg (LBBW), HSH Nordbank and West LB —
have been surviving on capital injections and guarantees from regional
governments and from Germany’s financial sector stabilisation fund,
SoFFin.
Those injections appear to have been sufficient to pass the stress
tests, according to the FAZ report.
“Capital increases of E10 billion (Bayern LB), E5 billion (LBBW)
and E3 billion each for the HSH Nordbank and West LB, appear to be
sufficient to withstand new pressures simulated in the test for 2010 and
2011,” the newspaper said.
“Landesbanks Hessen-Thueringen (Helaba), Nord LB, and Landesbank
Berlin, which did not require government support measures, have also
passed the tests albeit less successfully than those banks enjoying
support,” the newspaper said.
According to the report, Helaba and Nord LB are the two weakest
Landesbanks. Helaba had a tier-one capital ratio of just over 7%, and
Nord LB dropped below 7% in the worst-case scenario tested.
Banks must retain a tier one capital ratio of at least 6% under
different adverse scenarios to pass the test.
–Frankfurt newsroom +49 69 72 01 42; e-mail:jtreeck@marketnews.com
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