NIBC comfortably meets European stress test
NIBC has no sovereign debt exposure from Greece, Ireland, Portugal, Spain and Italy.
Although not required to perform the official stress testing, NIBC Holding voluntarily performed for the second time the European stress test in order to present a comprehensive and transparent view of the bank to the market. The stress test results confirm our strong financial position with a Tier-1 ratio of 10.7% and Core Tier 1 of 8.8% both after the two year stress scenario. Furthermore it is important to note that NIBC has no debt exposure from sovereign entities in Greece, Ireland, Portugal, Spain and Italy. Please find hereafter an overview of the stress test results.
Results of stress test
The exercise was conducted using the scenarios, methodology and key assumptions provided by the European Banking Authority (EBA) formerly Committee of European Banking Supervisors (CEBS) (see the aggregate report published on the EBA website). As a result of the assumed shock under the adverse scenario, the estimated consolidated Tier-1 capital ratio would change to 10.7% in 2012 compared to 14% at the end of 2010. The Core Tier 1 ratio would reduce from 11.6% to 8.8% comfortably exceeding the EBA benchmark of 5%.
The results of the stress suggest a buffer of EUR 811 million of the Core Tier-1 capital against the threshold of 5% of Core Tier-1 capital adequacy ratio for NIBC Holding agreed exclusively for the purposes of this exercise. This threshold should by no means be interpreted as a regulatory minimum, nor as a capital target reflecting the risk profile of the institution determined as a result of the supervisory review process in Pillar 2 of the Capital Requirements Directive (CRD).
Rating
NIBC furthermore wishes to reiterate Standard & Poor's recent outlook revision to stable from negative, affirming a 'BBB/A-2' counterparty credit rating on NIBC (research update release date June 27, 2011). The outlook revision primarily reflects Standard & Poor's view of decreasing downside risk to asset quality and improving underlying revenue generation.