Bankinter is rated first among the Spanish banks analysed in the EBA stress test

Bankinter has successfully passed the stress tests that the European Banking Authority (EBA), in cooperation with the European Central Bank (ECB) and the European Systemic Risk Board (ESRB), has applied to Europe's largest banks. The results released today show that Bankinter is one of the most solid and well capitalised financial institutions and that Bankinter leads the Spanish and European financial sector in terms of capital, capital adequacy, profitability and asset quality.

According to the results of the exercise, in a hypothetical, severely adverse macroeconomic scenario, the most severe of those that has been used by the EBA over time, Bankinter would be impacted, or suffer a ”capital depletion”, to its CET1 capital ratio of 104 basis points, which establishes Bankinter as the Spanish bank least impacted in terms of its capital adequacy during the stress scenario and the third least impacted among all of the entities analysed. This being the case, Bankinter would have, as at the end of the exercise period, 2023, a comfortable CET1 fully-loaded capital ratio of 11.25%, as compared to the 12.29% starting point that the bank had as at 2020 yearend.

In fact the 104 basis points is less impact than the bank incured during the 2018 stress tests, which was 114 basis points, with an adverse scenario - the current one - which is significantly more severe than the one used three years ago. It should be noted that during the 2018 stress test Bankinter was analysed by the ECB using the same scenarios and the same methodology as the EBA analysis. During those stress tests Bankinter was the bank with the second lowest impact on its capital adequacy in the adverse scenario among all of the European banks analysed. 

According to this year's EBA exercise, designed under common methodological assumptions which facilitate comparability of results between entities, Bankinter's RoE (return on equity) would reach 7.22% at the end of the period, in 2023, compared to the initial 7.60% as at the entity's 2020 yearend. This being, again, one of the leading results for this parameter during the exercise.

 

 

Regarding the total capital ratio, it would go from 15.02% in 2020 to 13.98% in 2023. It should also be noted that Bankinter has planned the exercise with a payout of 50% for both the base and adverse scenarios and for all forecasted years, the customary percentage of the bank's shareholder remuneration, compared to the 15% that the entity distributed in 2020, based on the ECB's recommendation.

This new EBA exercise of control and transparency is the most challenging of the historical series that the EBA has carried out over time, since it proposes a continuation of the economic depression for the next 3 years as a consequence of a prolongation of the health crisis caused by COVID 19.

This exercise, which has analysed a total of fifty European banks under the direct supervision of the EBA, to which those analysed by the ECB must be added, allows to reinforce the confidence of markets in the financial sector and contributes to make data disclosure among banks and countries more homogeneus, as this is sometimes an added difficulty for comparative analyses.

It is Bankinter's view that the new framework will serve to improve focus in Europe on the competitive advantages of the bank's balance sheet and income statement, as well as its resilience in response to severe scenarios. In this sense, the results obtained by Bankinter compare favourably with those of Spanish banks and also stand out among the remainder of the European banks.