Barclays Plc showed the worst results after stress test of EBA

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Barclays Plc showed the worst results after stress test of EBA

November 05, 2018 - 12:01
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Barclays Plc showed the worst results after stress test of European Banking Authority, Bloomberg reports. Total 48 banks went through the toughest test so far. It once again pointed out to vulnerability of UK’s banks to weaker growth, credit losses and Brexit.

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Barclays Plc showed the worst results after stress test of European Banking Authority, Bloomberg reports.

Total 48 banks went through the toughest test so far. It once again pointed out to vulnerability of UK’s banks to weaker growth, credit losses and Brexit.

Another UK’s lender Lloyds Banking Group Plc also demonstrated bad results. As a whole, British banks showed worse results than lenders in Germany and Italy.

Stress test from EBA assumes scenario, which includes such shocks as years of negative growth, low profitability and growing yields of government bonds amid uncertainty about Brexit. While banks have enough capital to withstand the hardest conditions, results of stress-test provide hint on necessity to add capital or about level of dividends, which bank will be able to pay its investors.

Common Equity Tier 1 ratio shall be 4,5% от of risk-weighted assets according to EU's requirements. Under adverse scenario this ratio will be 6,37% for Barklays, while for Deutsche Bank it will be 8,14%, for RBS 9,92%, for ING 10,21%, and for Nordea 16,68%.