Analysts optimistic about stress test results

The clock is ticking ahead of the release of the European banks’ stress test results, and executives at local lenders are displaying reserved optimism regarding the outcome of the exercise.

Domestic bank officials say that the high readings of their capital adequacy ratios create a safety cushion that could absorb the impact of the adverse scenario.

International experts appear even more optimistic: Bank of America Merrill Lynch has upgraded its estimates on the profits of local banks and appears hopeful on the stress tests, explaining that the use of the dynamic profile of banks for the test (taking into account the restructuring plans lenders have submitted to the European Commission) will suffice to ease concern about any additional capital requirements.

Deutsche Bank added in a recent analysis that European lenders, including the Greek credit institutions, should complete the extreme conditions exercise without any significant difficulties, as any needs emerging based on 2013 data will have already been covered by share capital increases.

The official results of the stress tests will be published in the second half of next month, with the most likely dates being October 24 or 31.

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