BayernLB CEO sees no problems in ECB stress test
MUNICH (Reuters) - BayernLB does not expect to face any problems in the upcoming balance sheet health checks led by the European Central Bank, despite an ongoing dispute with Austria over wind-down costs for nationalised Austrian bank Hypo Alpe Adria.
"Stress test, no, no problem," BayernLB Chief Executive Johannes-Joerg Riegler told journalists on Thursday. Turning to possible costs threatened by Hypo Alpe Adria, he said, "We're not talking about an existential threat here."
BayernLB on Wednesday said it would file a lawsuit against a law Austria passed this year that forces some creditors to share the costs of winding down Hypo Alpe Adria.
It is the first lawsuit against the law, which entered uncharted territory for debt markets by wiping out subordinated debt worth nearly 900 million euros (722.06 million pounds) despite guarantees from Hypo's home province of Carinthia.
State-controlled BayernLB's common equity tier 1 (CET1) ratio, a measure of its financial strength, edged down to 14.4 percent at the end of June from 14.6 percent at the end of March, still well above an ECB benchmark of 8 percent.
(Reporting by Joern Poltz, writing by Thomas Atkins)
