Industry supervisors and experts consider the German banks despite streaky results in European stress test in a severe economic crisis for resistant enough. “The stress test shows that the German banks are equipped to withstand these severe shocks,” said Bundesbank President Jens Weidmann. However landed the two largest German banks, German Bank and Commerzbank, among the 51 tested thoroughly European money houses among the last ten. More capital they needed but not why, explained the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), the banking supervision with the Bundesbank and the European Central Bank (ECB) is divided. “From the stress test result does not automatically result a capital requirement,” said a BaFin spokesman. Because the probability of extreme scenarios like these actually one boards, was low. Rather, the stress test is to provide additional information for the supervisors, when determining the individual capital requirements for banks.
“Not completely healthy”
The EU banking authority EBA who had organized the stress test, drew a cautious conclusion: the financial institutions have strengthened their capital buffers in recent years, but had not yet been completely healthy, said EBA Chairman Andrea Enria. “There is still a lot of work to do.” The ECB, which oversees two-thirds of the participants, was satisfied. “The banking sector is now more resilient and can better absorb economic shocks than two years ago,” said the top ECB bank supervisor Danièle Nouy. The banking associations pointed out that the banks had their risk buffers already substantially increased. “The hard core capital ratio fell naturally in response to stress, however, they remained reliable at all participating banks.”
According to the stringent – under the heading Basel known III – capital rules banks are only fully functional when they can have more than seven percent common equity in the balance. Who slips below this level, may as well not pay a dividend and not pay bonuses. Banks that spend less than 4.5 percent of common equity, are closed.
Among German banks, Commerzbank was the worst performer. Their hard core capital ratio in the stress scenario with 7.4 percent, well below the European average of 9.2 percent. So she came in 44th place, two places behind Deutsche Bank, with 7.8 percent of hard core capital ratio. The German bank holds the legal legacy of the main reason for their poor performance in the stress test. Legal cases the Bank have cost more than twelve billion euros since 2012 Design. “By this we are still suffering from, who currently 5.5 billion euros set aside for it,” said Chief Risk Officer Stuart Lewis. DekaBank came the stress scenario on a hard core capital ratio of 9.53 percent reached and was therefore at least slightly higher than the test mean. BayernLB (8.3) and NordLB (8.6) landed in the back field. The development bank NRW.Bank – a rarity in the circle of the tested homes – was 35.4 percent undisputed leader
The Bundesbank sees among German banks need for further reform.. “Even though the banks are stable, they must also earn like any other business, adequate money. And here is the weak point at present, “said Bundesbank board member Andreas Dombret. The low interest rates, digitization, stricter regulation and tougher competition provided the Institute with challenges. “Banks must urgently think about how they align their business models on it,” Dombret said.
“KPMG partner Daniel Quinten sees German banks as a victim of the stress test method. They meet universal banks and institutions with a high interest portion harder than banks with a very focused business model. Commerzbank building in refinancing mainly on customer deposits, which are particularly expensive in a crisis would after the stress scenario. “But a strong capital loss in the stress test need not be synonymous with a weaker banking system,” Quinten said. There would also have different rules for the introduction of the new “Basel III” -Kapitalvorschriften. BayernLB about was punished in the stress test for their silent contributions which it has in the meantime partly repaid. “If you remove this effect, the big German banks are not worse than others,” said Quinten.
For the biggest problem child was at the last minute found a solution. The third largest Italian bank, Banca Monte dei Paschi di Siena, submitted a rescue plan that they not only want to give off all loans with no prospect of repayment to a bank rescue fund, but another five billion euros to get fresh capital. The stress test revealed that a crisis would erase completely the capital of the oldest bank in the world because of the billions of load on bad loans. The Institute was in 2014 landed in last place. The Allied Irish Banks scored surprisingly the biggest losers with a capital ratio of 4.3 percent in the stress scenario. Last third was the Austrian Raiffeisen Zentralbank (RZB) (6.1 percent).(RTR, red)