Portugal's Banks Face Estimated EUR6.95 Billion Shortfall -EBA
December 08 2011 - 2:39PM
Dow Jones News
Portugal's banks are facing a combined shortfall of EUR6.95
billion in meeting the European Banking Authority's
recapitalization target, EBA data provided by Portugal's Central
Bank showed Thursday.
Four of Portugal's largest banks reported shortfalls: Banco
Comercial Portugues SA (BCP.LB) is facing a EUR2.13 billion
shortfall; Banco BPI SA (BPI.LB) a EUR1.389 billion shortfall;
Espirito Santo Financial Group SA (BES.LB) a EUR1.597 billion
shortfall; and state-owned Caixa Geral de Depositos SA a EUR1.834
billion shortfall.
The total is down from a combined EUR7.8 billion capitalization
shortfall reported when the capital exercise was last carried
out.
The announcement coincides with similar announcements made by
other European banks who have also been asked to unveil whether
they're on track to meet the EBA's recapitalization plan of
achieving a Core Tier 1 capital ratio of 9% after adjusting the
values of their government bond portfolios to reflect market
prices.
This is part of a "capital exercise" under which banks have to
demonstrate they are adequately capitalized, even in the context of
the current stressed market conditions for sovereign debt.
Bank recapitalization is one element of a multiple-part effort
to restore confidence in the credit of Europe's banks and
sovereigns.
The EBA's announcement comes directly after the European Central
Bank's monthly council meeting and immediately before a
"make-or-break" meeting of EU heads of government aimed at saving
the continent's monetary union.
-By Alex MacDonald, Dow Jones Newswires; +44 (00207 842 9328;
alex.macdonald@dowjones.com