FRANKFURT, Aug 28 (Reuters) - German state-backed landesbank lender LBBW is strongly capitalised and ready for European regulators’ stress tests of the banking sector, its chief executive said on Thursday.
Stuttgart-based LBBW, the country’s largest regional landesbank, is undergoing a review of its asset quality and stress tests conducted by the European Central Bank and the European Banking Authority, the results of which are due in October.
“We are well prepared for the upcoming stress tests,” Chief Executive Hans-Joerg Vetter said in a statement.
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.
LBBW reported its core capital ratio - a measure of the lender’s ability to withstand shocks - rose to 14.4 percent at the end of June from 13.1 percent at the end of December, well above an ECB benchmark of 8 percent.
“This gives LBBW a firm capital position,” Vetter said. (Reporting by Jonathan Gould; Editing by Maria Sheahan)