19/07/2011
By Matt Ritchie
All four participating Dutch banks performed well in the European Banking Authority’s stress test, according to de Nederlandsche Bank.
In the stress test banks modelled the implications of a hypothetical stress scenario, to see whether they would be able to bear the ensuing losses. The criterion applied was the impact on banks’ core tier 1 ratio, a solvency indicator in which only the highest quality part of banks’ capital is counted.
ING Bank, Rabobank, ABN AMRO and SNS Bank all took part, and performed “well above” the minimum standard a core tier 1 ratio of 5.0 per cent.
Under the adverse scenario, Dutch banks would write down €19 billion of their assets; or about one quarter of their core tier 1 capital. Despite the impact of the stress scenario, each individual bank remained amply capitalised, de Nederlandsche Bank said.
They proved to be most sensitive to losses on their commercial real estate portfolios, and under the stress scenario the rates Dutch banks have to pay on their financing increased by one half or more.
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