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BMN passes the stress test

15 Jul 2011

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The bank has nearly double the core capital demanded by the EBA analysis when the generic and substandard provisions are reckoned, reaching 9.3% in the worst of the hypothetical economic scenarios for 2012.

BMN, the bank formed by Cajamurcia, Caixa Penedès, Caja Granada and Sa Nostra, has comfortably passed the stress test performed by the European Banking Authority (EBA). In an adverse, and highly improbable scenario, the core capital (or core tier1) of the BMN Group would be 6.1% in 2012, that is 22% above the minimum demanded (5%) in the EBA’s stress test, and 9.3% in the same outlook if the generic provisions BMN has constituted are included.

The president of BMN, Carlos Egea, described these results as “especially satisfactory bearing in mind that the exercise has been performed with homogenous variables for all European banks, making for a more adverse computation of default in Spain and an impact of the greater differentials of sovereign debt, amongst others. These results must be interpreted including the generic and substandard provisions, singular aspects of our financial system constituted to absorb potential losses, something the EBA also declares”.

If we take these provisions into account, the core capital of the BMN Group is practically double that demanded, standing at 9.3% in 2012. The stress test was performed with data from 31st December 2010, so it does not yet include the synergies and benefits derived from the integration process underway, which is at a very advanced stage. The core capital of BMN at the end of 2010 was 8.3%.