Bloomberg News reports that only 22 of the 294 institutions surveyed for E&Y’s twice-yearly European Banking Barometer say they will need to raise capital following the ECB’s assessment, with a further 43 saying they might have to.
While about two-thirds of the banks are optimistic about the economic outlook and their own performance, one in three says it will increase provisions against loan losses in the next six months.
'On the face of it, squaring the optimism of banks about recovery and growth with their expectations around having to raise further capital is difficult', said Steven Lewis, lead global banking analyst at EY. 'But if you look more closely at the results, it’s clear that there is increasing divergence between the strong and the weak'.
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