HSBC also passes EU stress test
HSBC Bank Holdings plc also passed the EU stress tests. At 31 December 2009, it had a capitalisation ratio of 10.8%, well above the 6% capitalisation rate required by international banking standards.
Under the benchmark scenario at the end of 2011, HSBC Holdings plc’s capitalisation ratio rose slightly to 11.7%, still above the 6% capitalisation ratio required by the EU stress tests.
Under the adverse scenario, which assumes a 3% deviation of GDP for the EU compared to the European Commission’s forecasts cumulated over the two-year time horizon, HSBC’s capitalisation ratio decreased slightly to 10.4%, however it still remained above the 6% capitalisation ratio.
Under the additional sovereign risk shock, which represented a deterioration of market conditions of a similar magnitude as observed at the peak of the Greek crisis in early May 2010, HSBC’s capitalisation ratio decreased slightly more to 10.2%, however it still remained above the 6% threshold.
Lombard Bank Malta plc and APS Bank plc were not chosen by the CEBS (Committee of European Banking Supervisors).
Banif Bank, the recent addition to the retail banking sector in Malta, was not among the four Portuguese banks that were examined by the CEBS.
The exercise included a sample of 91 European banks, representing 65% of the European market in terms of total assets.
As a result of the exercise, under the adverse scenario 7 banks would see their Tier 1 capital ratios fall below 6%, with an overall shortfall of 3.5 billion € of Tier 1 own funds.
The threshold of 6% was used as a benchmark solely for the purpose of this stress test exercise. This threshold should by no means be interpreted as a regulatory minimum (according to the CRD the regulatory minimum for the Tier 1 capital ratio is set to 4%).
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