Brussels (ACN). - The European Banking Authority (EBA) has released the final figures required for the recapitalization of European Banks. According to the banking supervisor, Spanish Banks will need €26.17 billion before June 30th 2012. Spain’s financial sector is the second most in need of funds in Europe, behind Greece. The results of the ‘stress tests’ show five Spanish banks will need recapitalization: La Caixa, Banco Santander, BBVA, Bankia and Banco Popular, which represents 22% of the European total. Due to the tightening of the solvency requirements (core capital) from 5% to 9%, banks from the European Union are being forced to strengthen themselves with €114.685 billion, a increase of €8.238 billion compared to the first estimate made by the EBA at the end of October.
The affected banks will have to present their recapitalization plans on January 20th 2012 at the latest and will need to raise the funds before June 30th 2012, the deadline established by the EBA. The Spanish Ministry of Economy, has stated that national banks will not need €26.17 billion but instead only €17 billion, as the European supervisor will accept bonds as capital –more than €9 billion in assets turned into shares available for certain financial entities–.
The Catalan savings bank La Caixa is the only bank that will need less reinforcement in Spain: the EBA has asked the entity for €630 million before July 2012 –€28 million more than what was said in October–. Banco Santander will be the bank with the highest capital increase (€15.302 billion), followed by BBVA, with €6.33 billion, Banco Popular, with €2.58 billion, and Bankia with €1.33 billion.
A blow to German Banks
German Banks will need to attract over twice the amount of capital planned on October 26th: €13.1 billion instead of the original €5.2 billion, an increase that has been considered the major surprise of the EBA’s results. According to the Brussels’ resistance tests, the Greek financial sector is the one that requires the highest amount: €30 billion. In third place behind Spain is Italy, which will need €15.4 billion. Other European financial sectors such as the French will recapitalize with €7.324 billion, Belgium will need €6.313 billion and Austria €3.9 billion.