EBA identified no capital shortfall for LBBW

December 8^th, 2011

In its latest capital exercise, the European banking authority EBA has determined that Landesbank Baden-Württemberg (LBBW) does not have any capital shortfall. On the basis of the EBA methodology, LBBW has a Core Tier 1 ratio of 9.1 percent as of the end of September 2011 and thus satisfies the minimum requirement of 9 percent. The exercise measures sovereign bond exposure on a mark-to-market basis. In addition, it does not take account of the silent participations of EUR 4.2 billion. As previously reported, LBBW's actual regulatory Tier 1 capital ratio (i.e. including the silent participations) stood at 13.4 percent at the end of September 2011.

In an initial provisional calculation performed in October, the EBA had identified a shortfall of EUR 364 million in LBBW's capital. Since performing this test, however, the EBA has enhanced its testing methodology in consultation with the German regulatory authorities. In its October test, for example, the EBA had estimated LBBW's capital based on an own approach. By contrast, the current capital exercise is based on the capital reported by LBBW at the end of September in accordance with regulatory requirements.

Further details can be found on the Internet at:

Result of the capital exercise 2011 »