“German banks’ capital needs over €9.5bn vs EBA’s €5bn estimation”

Julia Pastor, in Madrid | The European Banking Authority (EBA) this week revised its figures about recapitalisation volumes needed in the EU institutions. Banco Santander analysts say that

“speculations about the German banks are circulation. They may have to increase capital by the amount of €9.5bn instead of the €5bn initially estimated by the EBA.”

Also, the Santander note reminded us that European banks are still carrying out liability management operations (the last one to take place was Lloyds’ last Thursday) and sales of non-strategic assets (RBS). In the same line, Commerzbank has announced this morning the re-purchase of €600 million in preferential shares to improve its capital ratio, after the German press announced that Berlin does no discard its nationalisation.

According to reports published on Monday, one of the options that Commerzbank is considering is the sale of its real estate subsidiary Eurohypo. Nevertheless, in the present market conditions, the entity seems unable to find a buyer. Commerzbank is the second bank in the ranking of German entities of which the State controls 25%.

The EBA has estimated that European banks’ capital needs amount to approximately €106bn.