The European Central Bank’s landmark review of eurozone banks will have to ask lenders to raise an additional 51 billion euros to be credible with markets, a Goldman Sachs survey of large institutional investors has found.
The survey of 125 institutional investors from around the globe also found that nine of the 130 banks being tested were expected to fail, with capital shortfalls most likely at Italian, German and Greek banks, according to a document circulated by Goldman Sachs on Tuesday night.
Perceptions of Greek, Central and Eastern European and Austrian banks have deteriorated most since October, the survey said, while investors’ views on Spanish banks have improved.
Greek and Italian banks are seen as most likely to fail, according to the survey.
Greece’s Piraeus, Eurobank and Alpha Bank were also among the top 10 most likely failures.
“There have been several reports out recently with different views on the outcome of the exercise. In this phase there is speculation in the market,” a senior Greek banker said.
“Greek banks have high capital buffers as a starting point.”
Fokion Karavias, senior general manager at Eurobank, the country’s third-largest lender by assets, told Reuters his bank was participating in the exercise “with confidence,” while Alpha and Piraeus declined to comment.