No clean bill of health for EU banks in stress test
By Huw Jones and Andrew MacAskill
LONDON (Reuters) - Banks from Italy, Ireland, Spain and Austria fared worst in the latest European Union stress test, which the region's banking watchdog said on Friday showed there was still work to do in order to boost credit to the bloc's economy.
Eight years since the collapse of Lehman Brothers sparked a global banking meltdown, many of Europe's banks are still saddled with billions of euros in poorly performing loans, crimping their ability to lend and putting off investors.
"While a number of individual banks have clearly fared badly, the overall finding of the European Banking Authority - that Europe's banks are resilient to another crisis - is heartening," Anthony Kruizinga at PwC said.
Italy's Monte dei Paschi (BMPS.MI: Quote), Austria's Raiffeisen (RBIV.VI: Quote), Spain's Banco Popular (POP.MC: Quote) and two of Ireland's main banks came out with the worst results in the EBA's test of 51 European Union (EU) lenders.
"Whilst we recognize the extensive capital raising done so far, this is not a clean bill of health," EBA Chairman Andrea Enria said in a statement. "There remains work to do."
Italy's largest lender, UniCredit (CRDI.MI: Quote), was also among those banks which fared badly, and it said it will work with supervisors to see if it should take further measures.
Monte dei Paschi, Italy's third largest lender, had been scrambling to pull together a rescue plan and win approval for it from the European Central Bank ahead of the test results. Continued...