Spanish banks were shown to need no more capital after the stress test. Liberbank, a lender with €45 billion of assets, was shown to have a €32.2 million capital deficit under the review and has already lined up €574.8 million this year to plug the gap, according to the results.
All the other 14 Spanish banks examined passed the asset quality and stress test.
The near collapse of former savings banks, including the Bankia group in 2012, forced Spain to take a €41 billion bailout from the EU that pressed the government into forcing banks across the system to recognise their losses linked to real estate.
Under that process Spain subjected its banks to stress tests the same year and forced lenders, including Banco Popular Espanol, to take steps to fix their balance sheets.
Restructuring process
“The reform and restructuring process of the Spanish banking system carried out in recent years has borne fruit,”
Bank
of Spain governor
Luis Maria Linde
said in a news conference in
Madrid
yesterday.
Spanish banks have taken charges of almost €280 billion for provisioning impaired assets between January 2008 and June 2104, Mr Linde said.
“Lenders in our country face the future with healthy balance sheets and a solid solvency positions.”
Prime minister Mariano Rajoy said that Spain's banking system was in "stupendous" shape.
"That's key to going deeper in the process of recovery of the Spanish economy," he said in a speech in Murcia yesterday.
Financial crisis
David Vaamonde
, an analyst at Main First Bank in Madrid, said while Spanish banks had been able to resolve doubts about solvency following the country’s financial crisis, the problems they face in building profits under conditions of low interest rates and weak credit demand had not gone away.
“The question now is what profitability are they going to be able to deliver in the future,” he said.
"The Spanish financial system has had excellent results which on the one hand are the result of reforms carried out by the government," said Jose Ignacio Goirigolzarri, chairman of Bankia, in an emailed statement.
“It’s also the consequence of good work by the Bank of Spain.” – (Bloomberg)
