NORD/LB: Stress test passed convincingly
NORD/LB Norddeutsche Landesbank has passed the EU-wide bank stress test convincingly. The bank’s scores for the Common Equity Tier 1 ratio of 10.93 per cent in the Baseline Scenario (minimum requirement: 8 per cent) and 8.77 per cent in the Adverse Scenario (minimum requirement: 5.5 per cent) were well above the respective minimum capital ratios.
“These results are evidence of the robustness of NORD/LB’s business model, with the effects of the shipping crisis more than compensated for by successes in other asset classes. They are also a confirmation for NORD/LB’s conservative risk policy which helped us getting through the financial market crisis unscathed,” said Dr. Gunter Dunkel, Chairman of the Managing Board of NORD/LB. “Despite strongly intensified requirements regarding the assessment of our shipping portfolio, NORD/LB has shown itself to be stress resistant.”
This is due not least of all to the cautious business policy in recent years, in which the bank has made significant loan loss provisions in particular for risks relating to the shipping crisis. Due to successful portfolio and risk management, the bank has also managed to return many exposures at risk of default to a solid economic footing. “We are continuing to work on value-preserving solutions for each individual case. Ship finance will remain a core business segment for NORD/LB,” stated Dunkel.
Irrespective of the results of the stress test, NORD/LB will continue its policy of consistently making valuation allowances and boosting its capital by its own efforts. Both the good business results in the year to date and further capital-releasing measures which are currently being prepared will provide the bank with the opportunity to further increase its capital ratios in the near future.
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