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Posted by Phil Murray on October 28, 2014

After months of preparation, and speculation, the wait is finally over as the results of the European Banking Authority’s (EBA) stress tests carried out on 123 European Union banks have now come in, with Spain fairing remarkably well.

The stress tests analyses how each bank would stand up in the most adverse conditions and whether or not they could withstand a second financial crisis. The analysis looked at their financial health at the end of 2013.

The EBA has announced that a total of 24 banks within the EU have failed the tests, none of them being Spanish.

In order of most solvent to least solvent, the banks in Spain were ranked as follows:

  • Kutxabank (11.8%)
  • Bankinter (11%)
  • Bankia (10.3%)
  • La Caixa (9.3%)
  • NCG Banco (9.1%)
  • BBVA (9%)
  • Banco Santander (8.9%)
  • Unicaja (8.9%)
  • Banco de Sabadell (8.3%)
  • Banco Mare Nostrum (8.1%)
  • Cajas Rurales Unidas (8%)
  • Catalunya Banc (8%)
  • Ibercaja (7.8%)
  • Banco Popular (7.6%)
  • Liberbank (5.6%)

While the results of the tests were positive for Spain, it has to be remembered that numerous banks in this country have been injected considerably with public money since 2009 in an effort to get them healthy again after the economic crisis and recession.

In addition, our banks received a 40 billion euro boost last summer and also improved their own situation by continually making provisions to cover losses each year. This all helped to change the Spanish financial system drastically compared to before.

Nevertheless, they are still ten times more robust than they were the last time the stress tests took place, which was three years ago, in 2011.

Amongst the European banks that failed the tests are nine from Italy, three from Greece, three Cypriot banks, one Irish bank, one from Portugal, two Belgian banks, one French bank, one from German, two Slovenian and one from Austria.

To pass the test, the banks had to achieve an 8% capital ratio in normal conditions, and 5.5% in adverse ones. In adverse conditions Kutxabank scored more than double the ratio required to pass with 12% and is the strongest bank in Spain, beating BBVA and Santander by 3%.

The banks that have failed now have nine months in which to rescue the situation or risk being closed down by the EBA.

Source: www.idealista.es, www.elpais.com


  • Spain
  • EU
  • EBA
  • stress tests
  • financial sector
  • Spanish banks


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