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 Austria's Erste Group rejected the report from Spanish newswire Efe,
which said that it along with banks from Italy, Belgium, Cyprus,
Portugal and Greece, had failed the ECB review based on preliminary
data, but it gave no details of the size of the capital holes at the
banks.
The ECB, which will publish the test outcomes for 130 banks on
Sunday, said final results had not yet been sent to the lenders
involved, and it could not comment on individual institutions.
"Any inferences drawn as to the final outcome of the exercise would
be highly speculative until the results are final on 26 October,"
said an ECB spokesman.
The European Banking Authority, the EU watchdog coordinating the
Europe-wide stress test, said the results would not be final until
they are endorsed on Sunday just prior to publication. It had no
comment on individual lenders.
Erste told Reuters it had no reason to believe it would fail the
test.
Banks have already had some feedback on the outcome of the tests
through 'supervisory dialogues' with the ECB. They get the results
on Thursday, three days ahead of the public announcement. The ECB
becomes supervisor of the euro zone's banks on Nov. 4.
"Out of the supervisory dialogue we have no indication we won't
pass," an Erste spokesman said. The bank's shares were down 1.4
percent at 6.37 a.m. EDT.
There were no immediate comments from the other affected banks on
the report, which briefly caused the euro to dip and led to European
stocks reversing early gains.
Most shares of the banks mentioned in the report were under
pressure, though the banking sector index <.SX7E> recovered from
earlier losses to edge up 0.1 percent.
"The bigger, more important question is not which banks have failed
but which banks have achieved only a marginal pass," said Jeremy
Batstone-Carr, head of private client research at Charles Stanley.
IN THE CROSSHAIRS
Sources told Reuters that German public sector lender HSH Nordbank -
which was not named in the Efe report - was set to pass the health
checks. HSH was seen as the German lender most likely to fall short
of requirements.
Other than Erste, the banks listed by Efe were Italy's Banco
Popolare, Monte dei Paschi and Banca Popolare di Milano;
Greece's Alpha Bank, Piraeus Bank and Eurobank, Portugal's
Millennium and Belgium's Dexia.
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The agency also said a second, unnamed Austrian bank and a Cypriot
bank were set to fail.
"They are wrong," a senior Cypriot official told Reuters. He added
that one Cypriot bank had already pre-emptively raised capital, and
another had the full backing of shareholders to raise money if it
needs to. "That's hardly a failure," he said.
One London-based trader from a major U.S. bank questioned the
accuracy of the list. "This is taking a 2013 snapshot and most of
the banks on that list have already raised money through 2014 and
done significant balance sheet actions this year," the trader said.
One Austrian bank that is expected to fail is the country's
part-nationalized lender Volksbanken AG which has already said it
plans to wind itself down to avoid a looming capital crunch it was
struggling to plug.
All three Italian banks declined to comment, though Banca Popolare
di Milano's CEO said last week that the feedback he had got from the
ECB in the one-to-one meeting was reassuring. Alpha and Millennium
BCP also declined to comment, while the other banks could not
immediately be reached.
Spanish Economy Minister Luis de Guindos said he was confident
Spanish lenders would do well in the health checks, pointing to
benefits from financial reforms after a property sector collapse
left many banks in need of state aid.
(Reporting by Sarah White and Eva Taylor and Jonathan Gould in
Frankfurt, Laura Noonan and Sudip Kar-Gupta in London and Michele
Kambas in Nicosia, Blaise Robinson in Paris, additional reporting by
Reuters buros, writing by Eva Taylor, Editing by John Stonestreet)
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