Spain’s banks pass the stress test!

SPAIN'S banks have all passed the 'European stress test' with only one found to be a little weak, making the country's financial network the strongest on the continent.

Nine banks in Italy failed, and the European Central Bank (BCE) found capital deficits totalling 25 billion euros in 25 banks in the Eurozone. As for Spain, the most solvent entity is Kutxabank, formerly known as the BBK, with an 11.9% 'cushion' of capital to call upon in times of need.

The others in the top five were named as Bankinter (11%), the State-owned firm Bankia (10.3%), CaixaBank (9.3%) and Novacaixagalicia, or NCG (9.1%).

This measurement, or 'stress test', analyses the ability of high-street financial institutions to maintain a capital buffer zone of at least 8%, or down to 5.5% in a worst-

Although one Spanish entity, Liberbank, effectively failed the 'stress test' because of a capital deficit of 32 million recorded as at December 31, steps taken so far this year means its capital now sits at 640 million and would therefore be solvent enough to pass if the test was 'retaken' based upon today's figures.

Germany had the highest number of banks examined - 24 - and Spain and Italy had 15 Aside from the nine Italian banks which failed the 'stress test', four in Cyprus, three in Greece, two in Belgium, one in Germany, two in Slovenia, and one each in the Republic of Ireland, Austria and Portugal failed to meet the target - a total of 25.

Banks in the UK are not subject to the test as they are not within the Eurozone.