Spain's banks have $76 billion capital deficit in stress test

Spanish banks test better than expected

Popular Plan

A group including Ibercaja, Caja3 and Liberbank had a 2.1 billion-euro deficit and the Unicaja and Caja Espana-Caja Duero group a 128 million-euro surplus, the results show. Santander had a 25.3 billion-euro surplus and BBVA’s was 11.2 billion euros. CaixaBank and Banca Civica had a combined 5.7 billion- euro surplus, while Bankinter SA’s totaled 399 million euros.

Popular repeated its position that it won’t seek state aid and will present a business plan and strategy to bolster capital shortly, the Madrid-based lender said in a filing to regulators.

The test results follow yesterday’s announcement of Spain’s 2013 budget, which outlined the government’s plans to freeze public wages, end tax rebates on mortgages, tax lottery winnings and cut ministry spending. Spain is committed to cutting its budget deficit to 4.5 percent of economic output next year compared with a 6.3 percent goal for 2012.

Loan Quality

The stress tests analyzed 36 million loans and 8 million guarantees using information from the databases of lenders and the Bank of Spain, the joint statement said. A team of more than 400 auditors verified the quality of loans by examining 115,000 loan operations, it said.

The Oliver Wyman stress test follows government orders to banks in February and May to recognize 84 billion euros of losses on real estate assets and a royal decree last month that lays out a legal framework for dealing with failing lenders and setting up a bad bank to isolate soured assets.

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