UPDATE: Spanish Banks Tackle EUR26.2 Billion Capital Shortfall
October 27 2011 - 5:31AM
Dow Jones News
Spain's five largest banks said Thursday that they will act
rapidly to fill a combined capital shortfall of EUR26.2 billion by
retaining earnings and selling assets, and that they won't need
additional state aid.
The two biggest banks, Banco Santander SA (STD) and Banco Bilbao
Vizcaya Argentaria SA (BBVA), reported a capital shortfall of
EUR6.47 billion and EUR7.09 billion, respectively, in the latest
capital excercise carried out by the European Banking Authority.
Three other banks were found to need smaller amounts.
Both banks said they would be able to surpass the higher capital
requirements by the June 2012 deadline through earnings retention,
asset sales and by reducing the amount of risk-weighted assets on
their balance sheets.
BBVA Chief Financial Officer Manuel Gonzalez Cid said his bank
would respond "quickly and strongly" to fill the capital
shortfall.
"It changes dramatically the capital plan that we had because we
were affronting different regulation than this, but if this
restores confidence in Europe... this is welcome," Gonzalez Cid
said.
Santander said it didn't plan to cut the dividend or issue new
shares to reach the new minimum threshold of a core Tier 1 capital
of 9%.
The EBA tests were done using results through June, so both
banks adjusted down their needs after incorporating earnings
through September. At that date, BBVA's capital shortfall would be
EUR6.4, while Santander's would be EUR5.22 billion, the banks
said.
Spain's lenders were found to need roughly a quarter of the
total capital shortfall for European banks, which EBA estimated at
EUR106.4 billion.
La Caixa, the third largest banking group in Spain, had a
shorfall of EUR602 million. Grupo BFA, the parent company of Bankia
SA (BKIA.MC), needs EUR1.14 billion, and Banco Popular Espanol SA
(POP.MC) needs to raise EUR2.36 billion.
Popular said its capital needs won't affect its plans to buy
smaller rival Banco Pastor SA (PAS.MC).
-By Christopher Bjork; Dow Jones Newswires; +34913958123;
christopher.bjork@dowjones.com
BBVA Bilbao Vizcaya Arge... (NYSE:BBVA)
Historical Stock Chart
From May 2024 to Jun 2024
BBVA Bilbao Vizcaya Arge... (NYSE:BBVA)
Historical Stock Chart
From Jun 2023 to Jun 2024
