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European banks have $115bn shortfall

Paris, January 26, 2014

European banks have a combined capital shortfall of about 84 billion euros ($115 billion), German weekly WirtschaftsWoche reported, citing a new study by the Organisation for Economic Co-operation and Development (OECD).

French bank Credit Agricole has the deepest capital shortfall at 31.5 billion euros, while Deutsche Bank and Commerzbank have gaps of 19 billion and 7.7 billion euro respectively, the magazine said.

It was not clear whether the OECD had looked at the listed entity Credit Agricole which is less well-capitalised than its parent, Credit Agricole Group, an unlisted network of co-operative retail banks, which the Bank of France will regulate in terms of solvency ratios.

Although it used a different method of calculating the shortfalls, the OECD said it expected the European Central Bank would come to the same conclusion later this year in its audit and bank stress tests, the magazine quoted the study as saying.

Deutsche Bank said earlier this month its common equity tier 1 capital ratio was 9.7 per cent while its leverage ratio had reached 3.1 per cent as of December 31.

Credit Agricole, which will report fourth-quarter results on February 19, reported a core tier 1 ratio of 9.4 per cent as of September 30, while Commerzbank had a core tier 1 ratio of 12.7 per cent on that date.

Commerzbank is due to report its results on February 13.-Reuters




Tags: OECD | capital | European banks |

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