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Final report on the implementation of the recapitalisation exercise

10/03/2012 / Press release

The EBA Recommendation on the creation of temporary capital buffers to restore market confidence was adopted by the Board of Supervisors on 8 December 2011 to address the difficult situation in the EU banking system, especially with regard to the sovereign exposures, by restoring stability and confidence in the markets. The Recommendation was part of a suite of measures agreed at EU level.

The Recommendation called on National Authorities to require banks included in the sample to strengthen their capital positions by building up an exceptional and temporary buffer such that their Core Tier 1 capital ratio reaches a level of 9% by the end of June 2012. In addition, banks were required to an exceptional and temporary capital buffer against sovereign debt exposures to reflect market prices as at the end of September 2011. The amount of the sovereign capital buffer has not been revised.

The initial sample of the Capital Exercise included 71 banks. However, the 6 Greek banks were treated separately as the country is currently under an EU/IMF assistance programme. Moreover, 4 banks (Öesterreichische Volksbank AG, Dexia, WestLB AG and Bankia) from the original sample have been identified as undergoing a significant restructuring process, and are being monitored separately. Therefore, the final assessment published today refers to 61 banks.

The results of both banks included in the exercise regarding the final assessment of the capital exercise and fulfilment of the EBA December 2011 Recommendation show the following:

  • Nova Ljubljanska banka meets the 9% Core Tier 1 ratio including the sovereign buffer as stated in the EBA December 2011 recommendation.
  • Nova Kreditna banka Maribor has a remaining capital shortfall as of 30 June 2012, which is being addressed through the implementation of the corresponding backstops with the explicit support of the Republic of Slovenia.

Results are available on the web page:  Final report on the implementation  of the recapitalisation exercise in uniform format provided by the EBA.