Italian Banks Under the Microscope

CATEGORY: Latest News
DATE: 29 Temmuz 2016
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Capital at Risk — Average by Country

Non-Performing Loan Average and Maximum

The European Banking Authority will release its assessments of 51 of Europe’s largest 53 banks late on Friday.

According to Fitch Ratings, Italian, Irish and Spanish banks are expected to be a focus for market participants, where non-performing loan ratios are high. However, Fitch Ratings says that the stress tests were unlikely to reveal any new issues, but would serve to put further pressure on the banks to address the existing problem.

Nine German banks are included in the stress test, along with six in both Spain and France, five based in Italy and four in the U.K., Sweden and the Netherlands as well as banks from seven other EU countries. Outside of the EU, one bank from Norway is included.

In a note entitled “Focus on Italian Banks in EBA’s Upcoming Stress-Tests”, Fitch said that it expects “more highly rated banks to show greater resilience

under the adverse scenario. But the degree of stress in the adverse scenario differs across EU countries (the real-estate stress in Sweden, for example, is more severe than in other countries), and this needs to be understood when interpreting the results.”

Fitch said that stress test results that fall below its expectations could lead to arating review “after the reasons for a bank’s particularly weak performance are assessed.”

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