ECB comprehensive assessment results in capital increases at Sberbank Europe and VTB Bank Austria

In 2015, another nine European banks were subjected to the European Central Bank’s (ECB) comprehensive assessment. Among these institutions are two Russian subsidiaries that run their European business from Vienna, Sberbank Europe (SBE) and VTB Bank Austria (VTB). Due to their extensive cross-border activities, the ECB has added these two banks to the list of significant institutions.

The comprehensive assessment is the ECB’s thorough review of participating banks’ books that each bank under the direct supervision of the ECB has to go through. With regard to the methodology and process applied, this year’s exercise largely followed the approach of 2014. In cooperation with the Austrian Financial Market Authority (FMA) and the Oesterreichische Nationalbank (OeNB), the ECB conducted both an asset quality review (AQR) and a stress testing exercise.

Under the baseline scenario, both banks remained above the 8 % threshold for the CET1 ratio (SBE: 8.9 %, VTB: 8.8 %); these figures include the results of the AQR. Under the adverse scenario, by contrast, both banks failed to meet the 5.5 % threshold, reaching a CET1 ratio of 4.2 % (SBE) and 4.1 % (VTB). However, both Sberbank Europe and VTB Bank Austria were able to more than cover the shortfall through material capital increases (SBE: EUR 240 million and VTB: EUR 200 million) already before the conclusion of the comprehensive assessment.