Bank Stress Tests: Italy, UK and Germany Look Weak

The Italian banking system is deeply troubled, according to the European Banking Authority’s latest stress-test results. And UK banks "do not inspire confidence"

Stephen Ellis 1 August, 2016 | 12:35PM

The Italian banking system is deeply troubled, according to the European Banking Authority’s latest stress-test results.

The results revealed the weakest systems include Italy, the United Kingdom, and Germany, in line with Morningstar equity analysts’ ratings of poor, fair, and fair, some of the lowest ratings among the banking systems covered.

Italian bank Monti dei Paschi di Siena was actually shown to be insolvent, with a negative fully loaded common equity Tier 1 ratio at the end of 2018 under the adverse scenario. The bank announced that it has raised a conditional €5 billion from a consortium of banks, including Goldman Sachs, Credit Suisse, Deutsche Bank, BAML, Santander, and Citigroup.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Barclays PLC106.64 GBX1.95
Lloyds Banking Group PLC28.33 GBX1.96
The Royal Bank of Scotland Group PLC113.75 GBX2.85

About Author

Stephen Ellis  Stephen Ellis is a senior stock analyst on the Energy Team.

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