June 11, 2019 / 7:08 AM / 6 months ago

Czech banking sector not under threat in adverse scenario testing -central bank

PRAGUE, June 11 (Reuters) - The Czech banking sector’s stability would not be under threat in the central bank’s adverse scenario assuming a fall into a V-shaped recession, stress test results showed on Tuesday.

Under the scenario, nine banks representing 13% of the sector’s assets would record a fall in their capital ratio below the regulatory minimum of 8%. Necessary capital injections would total 30.4 billion crowns ($1.34 billion), or 0.6% of GDP, the results published in the bank’s Financial Stability report showed.

“Relative to the size of the banking sector, this figure is not large enough to jeopardise its stability,” the report said.

The sector’s aggregate capital ratio would stay above 8%, the report said.

Necessary capital injection under an adverse scenario in stress tests a year ago totalled 26.9 billion crowns. ($1 = 22.6470 Czech crowns) (Reporting by Jason Hovet)

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