Wednesday 7 December 2016

Irish arm of banking giants passes ECB health check

Published 04/11/2016 | 19:05

The Irish arm of banking giant Citibank, Italy’s Banca Mediolanum and Slovenia’s Abanka have passed a European Central Bank (ECB) health check, the regulator said on Friday, while Latvia’s Rietumu did not consent to its results being published.

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The ECB said it had found no capital shortfall at the three lenders in its “comprehensive assessment”, a review of the financial health of each of the banks that now paves the way for the banks to be directly supervised by the ECB, alongside other large lenders.

Citibank’s long established Dublin based arms are coming under direct ECB regulatory umbrella for the first time as a result of a reorganisation within the group that resulted in assets controlled here reaching the €30bn threshold for ECB oversight. 

“Citibank Holdings Ireland Limited, and its operating subsidiary Citibank Europe Plc, have successfully completed the European Central Bank’s Comprehensive Assessment which has confirmed the capital strength of the entities, in both a baseline and adverse stress scenario,” the US bank said in a statement.

“This is an important milestone for Citi in Europe and we look forward to a strong engagement with the Single Supervisory Mechanism and our Joint Supervisory Team.”

In its statement, the ECB said that none of the three banks, including Citibank, fell below the relevant thresholds based on the impact of the asset quality review (AQR) and stress test. As a result none will face capital shortfalls.

“However, the banks will be expected to undertake actions to address qualitative findings of the AQR such as deficiencies in policies, and processes and weaknesses in data systems. This is consistent with the approach taken in the previous exercises in 2014 and 2015.

The ECB said that the firms “will be expected to undertake actions to address qualitative findings...such as deficiencies in policies, and processes and weaknesses in data systems

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