One large euro zone bank is short of capital: ECB


A eurozone bank falls short of the European Central Bank's own funds requirements, the ECB said on Monday, which means it could be asked to reduce bonuses, dividends and coupons .

The ECB has not named the bank in its annual review of the 119 lenders under its control, in which it has maintained the amount of capital that it expects banks to withhold against possible losses more or less stable compared to the previous year.

The record shows that the ECB's three-year campaign to get more capital and clean up the ECB's balance sheets is paying off, but weaknesses remain, especially in companies with high unpaid loans.

"Banks are largely resilient and stable," Korbinian Ibel, an ECB supervisor, said in a presentation. "Residual risks are focused on profitability and unproductive loan issues."

A chart of the presentation shows that most of the ECB's supervised banks held significantly more capital than the minimum required to make payments to investors and staff.

One bank, however, fell short of the mark and another was barely above. A year earlier, five banks were found to be short of requirements. Two of them, Banca Popolare di Vicenza and Veneto Banca, Italy, then collapsed.

On average, the ECB expects the banks in its custody to hold capital representing 10.6% of their weighted assets. This includes optional additional requirements and "guidance" set by the ECB.



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