WestLB Passes EU Stress Test
• Tier 1 capital ratio in adverse scenario, before additional stress for sovereign exposure, 2011: 8.9%
• Tier 1 capital ratio in adverse scenario, including additional stress for sovereign exposure, 2011: 7.1 %
On the basis of a resolution of the European Council in June 2010, WestLB was one of 91 European banks (including 14 German banks) which took part in a stress test of macroeconomic scenarios coordinated by the Committee of European Banking Supervisors (CEBS). In all scenarios, i.e. also in two so-called adverse scenarios – one excluding and one including additional stress assumptions for sovereign exposure –, WestLB´s Tier 1 capital ratio for 2010 and 2011 exceeded the minimum ratio laid down by the regulators. The stress test for WestLB was based on the Core Bank excluding the assets transferred to the Erste Abwicklungsanstalt (EAA) and the equity investments to be divested as a result of the agreement reached with the European Commission in May 2009. The capital base includes the full € 3 billion silent contribution to capital from the SoFFin.
According to the requirements of the stress tests, WestLB achieved the following Tier 1 capital ratios for 2011: 8.9% in the adverse scenario before additional stress for sovereign exposure and 7.1% in the adverse scenario including additional stress for sovereign exposure. These are not statements on the figures which are actually expected for 2010 and 2011. Possible countermeasures to be adopted by the Bank in the event of a crisis, which can be introduced to minimise losses as well as reduce capital requirements, are also not taken into account.
Dietrich Voigtländer, Chairman of the Managing Board of WestLB AG, said:
“The test results fully corroborate our belief that, following the restructuring, WestLB is today a solidly capitalised bank with a clear customer focus. The Bank approaches with confidence the forthcoming talks concerning a change of ownership – either through a sale or through a consolidation in the Landesbank sector.”
For further details please refer to the result tables, which can be downloaded at www.westlb.com.