By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European banks rallied at the open on
Monday after the European Central Bank and the European Banking
Authority said most of the region's lenders passed stress
tests.
Shares of Commerzbank were up 5.6%, one of the biggest gains in
the Stoxx Europe 600 index . Banco Popular Español SA rose 2.5%,
Deutsche Bank AG (DB) climbed 2.2%, and UniCredit SpA added 1.7%.
All those banks were among the lenders that passed the ECB's stress
tests, an indication the central bank believes they are strong
enough to weather a financial storm.
Twenty-five banks flunked the test, as they face a capital
shortfall of 24.6 billion euros ($31.2 billion). However, 13 of
those lenders have already taken steps to beef up their capital
buffers.
The rally for banks helped lift European benchmarks in early
Monday trade, with the Stoxx Europe 600 index up 0.4% to
328.47.
Germany's DAX 30 index gained 0.6% to 9,038.10, while France's
CAC 40 index added 0.4% to 4,146.33. The U.K.'s FTSE 100 index
picked up 0.4% to 6,412.79. British banks were not subject to the
ECB's stress test, but were instead assessed by the EBA. All four
U.K. banks in the test were given a green light, although Lloyds
Banking Group PLC (LYG) only narrowly passed.
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