Sunday 17 November 2019

Stress tests 'will show nothing untoward'

Laura Noonan

THE soon-to-be published stress-test results for Anglo Irish Bank and Irish Nationwide are likely to show "nothing untoward", Finance Minister Michael Noonan said yesterday.

Mr Noonan's comments in Brussels yesterday came as the Central Bank prepared to publish results on Anglo/ Nationwide stress tests by the end of the month.

Anglo is understood to need no additional capital, though there are some fears that the tests threw up further losses for Nationwide.

The European Commission has held off approving the Anglo/Nationwide business plan in case the stress tests trigger further capital demands, but Mr Noonan said his fellow European finance ministers were not overly concerned about the prospect of further bailouts.

"I haven't heard anything like that," he said, adding that Europe believed Ireland had pumped ample capital into the ailing banks.


Asked about the results of the stress tests, which have already been submitted in draft form to the Central Bank, Mr Noonan said: "I can't predict the results of the stress tests, but the advice is there's nothing untoward."

"Anglo is not really a bank anymore, they don't take deposits or make loans. it's really just a warehouse for impaired loans so it doesn't need to be capitalised in the same way [a bank does]," he added.

The Anglo/Nationwide stress tests are being carried out by consultant BlackRock, which was behind the March 31 stress tests on AIB, Bank of Ireland, EBS and Permanent TSB, which led to a combined €24bn capital demand for the banks.

In an annex to the March stress tests, BlackRock played down the likelihood of Anglo needing more cash, but said Nationwide's losses could be €195m worse than expected under the "adverse" case.

This "relatively small" demand will "likely not be realised until after 2015", BlackRock said.

"The Central Bank estimates that by this time, the surplus capital of the new merged entity . . . would be more than adequate to absorb such additional losses," BlackRock added.

Irish Independent

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