FRANKFURT Aug 28 German state-backed lender
NordLB said it was confident of its position in
upcoming health checks of Europe's banking sector, despite a
troubled market in its specialty business of ship financing.
The landesbank is seen as one of the German lenders that may
have the toughest time in a review of asset quality and in
stress tests by the European Central Bank and the European
Banking Authority, the results of which are due in October.
"We will not participate in speculation about the outcome of
the stress tests but we feel we are well prepared for them," a
NordLB spokesman said.
"We are relaxed about October," he added.
The financial health checks are aimed at giving regulators
clear insight into the state of the banking sector before the
ECB takes over responsibility for banking supervision in the
euro area in November.
NordLB's Common Equity Tier 1 ratio - a measure of its
capital strength - stood at 10.7 percent at the end of June,
compared with an ECB benchmark of 8 percent.
The landesbank said it added a further 224 million euros
($296 million) to its buffers against bad loans - mainly in its
ship financing business - in the first half of the year, which
was substantially less than the 432 million added in the first
half of 2013.
"We have built up an extraordinarily high risk shield for
this segment over the last few years," NordLB Chief Executive
Gunter Dunkel said in a statement.
"We will stay alert and continue to build risk provisions,"
he said, adding that the environment for shipping remained
difficult and the bank would need to deal with it for some time
($1 = 0.7569 euro)
(Reporting by Jonathan Gould and Andreas Kroener; Editing by