Of these 24, 10 had already raised additional capital in 2014, leaving a total of 14 banks with inadequate capital ratios.
The list includes four Italian banks, two Greek banks, two Belgian banks and two Slovenian banks. The worst affected was Italian bank Monte dei Paschi, which had a capital shortfall of €2.1bn (£1.65bn).
Four UK banks were subjected to the EBA test: Royal Bank of Scotland, HSBC, Lloyds Banking Group and Barclays. None of them failed the tests – although Lloyds’ capital buffer would take a significant hit, falling from 10.2% to 6.2% in an adverse scenario, while RBS had a healthier 7.2% capital buffer.
The EBA had subjected 123 financial institutions across Europe to tests designed to assess their resilience in adverse market conditions.
The review was based on the health of banks’ capital ratios at the end of 2013. To pass the capital adequacy test, banks must have a 5.5% tier one equity buffer.
The EBA and ECB hope the tests will keep a lid on systemic risk in the banking sector and prevent another financial crisis.
The 14 banks which still have a capital shortfall
- Oesterreichische Volksbanken (Austria)
- AXA Bank Europe, Dexia (Belgium)
- Hellenic Bank Public Company (Cyprus)
- Eurobank Ergasias, National Bank of Greece (Greece)
- Permanent TSB (Republic of Ireland)
- Banca Carige, Monte dei Paschi, Banca Popolare di Milano, Banca Popolare di Vicenza (Italy)
- Banco Comercial Portugues (Portugal)
- Nova Kreditna Banka Maribor, Nova Ljubljanska Banka (Slovenia)