October 31, 2018 / 3:25 PM / 21 days ago

Germany's NordLB to score around 7 pct CET1 ratio in EU stress tests - source

BERLIN, Oct 31 (Reuters) - German public-sector bank NordLB will score a core capital (CET1) ratio of around 7 percent for 2020 in the latest stress test of top European lenders to be released this week, a person with knowledge of the matter said on Wednesday.

There is no formal pass/fail mark, but investors are checking how much core capital lenders hold against a threshold of 5.5 percent under the test’s toughest “adverse” scenario.

The closely watched health check could force laggards to raise capital or ditch assets. The test of 48 banks across the European Union will be published by the European Banking Authority (EBA), the bloc’s banking watchdog, at 1700 GMT on Friday.

NordLB had a CET1 ratio of 12.4 percent at the end of June.

NordLB and its majority shareholder, the state of Lower Saxony, declined to comment. (Reporting by Klaus Lauer Writing by Tom Sims Editing by Kathrin Jones and Maria Sheahan)

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