Bloomberg News

Norway Banks Won’t Face Problems Meeting EBA Demands, FSA Says

October 27, 2011

Oct. 27 (Bloomberg) -- Norway’s banks won’t face any problems meeting the European Banking Authority’s capital demands, the country’s financial regulator said.

Norway’s Financial Supervisory Authority said it supports the recapitalization of the banks, according to an e-mailed statement. The EBA calculated that Norwegian banks need to raise 1.3 billion euros ($1.9 billion) to reach a required 9 percent core Tier 1 capital ratio starting in mid-2012.

DnB NOR ASA, which according to EBA tests had a common equity Tier 1 capital ratio of 7.9 percent, said today it is able to meet the EBA’s requirements by redistributing capital internally. “No external capital injection is required,” Norway’s biggest lender said.

Europe’s banks will need to raise 106 billion euros in fresh capital under tougher rules being introduced in response to the euro area’s sovereign debt crisis, the region’s top banking authority said. Seventy banks were tested, the EBA said late yesterday.

The lenders have until Dec. 25 to submit their plans for raising the money to national supervisors. The extra reserves are needed to meet a temporary requirement for lenders to hold 9 percent in core reserves, after sovereign debt writedowns.

--Editors: Jonas Bergman, Tasneem Brogger

To contact the reporter on this story: Josiane Kremer in Oslo at Jkremer4@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


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