The rise in bank stock, supported by the stress tests
European banking stocks were up, supported by the results of resistance tests conducted by the European authorities to restore market confidence.
Investors, who had initially criticized the methodology of stress tests conducted by the Committee of European Banking Supervisors (CEBS), believe that exercise helps alleviate fears about the solvency of banks.
Having suffered in mid-morning on concerns about exposure of Deutsche Bank in sovereign debt, the sector index Stoxx 600 European banks is again on the rise.
Around 12:50, the index has risen by 0.41%.
The Societe Generale and ING shares rose 2.97% respectively at 39.12 euros and 3.08% to 7.1280 euros.
The Santander, the first bank capitalization in the euro area remained stable at 10.11 euros after opening up to the Madrid Stock Exchange.
"The stress tests show that the French banks and European banks in general, are more truly threatened by a solvency risk," notes Simon Willis, NCB Stockbrokers analyst financial in a research note.
"It remains for banks to find sufficient levels of profitability, long-term effort that requires strategic reviews of activity and improvements in their organization," he says.
Analysts at Credit Suisse in turn emphasize that the publication of detailed exposure to sovereign debt will enable investors to better understand the needs to recapitalize banks and credit risks in the event of default on the debt of a State.
Of the 91 banks in the European Union subject to the tests, only seven property – five Spanish, one German and one Greek – have failed and could therefore be forced to raise 3.5 billion euros of equity.
Others were successful only just like German or Italian Deutsche Postbank Monte dei Paschi di Siena.
DEUTSCHE BANK ASSENTED
French banks BNP Paribas, Societe Generale, Credit Agricole and BPCE have all passed the test of successful resistance, which allows securities to outperform their benchmark.
BNP Paribas gained 0.86% to 50.22 euros, Crédit Agricole 0.94% to 9.44 euros.
The Franco-Belgian Dexia, which has also passed the tests, scores 2.6% to 3.39 euros.
In Germany, Deutsche Bank, which also passed the tests, is punished by investors for failing detailed its exposure to sovereign debt.The title and yielded 1.24% to 49.13 euros.
The Committee of European Banking Supervisors will also ask the German banks to explain why they did not give details Friday of their holdings of sovereign debt.
In conducting these tests, CEBS and the European Union have sought to ensure that large EU banks had sufficient capital to cope with a deteriorating economy would be worse than expected and new shocks.
Learning from the Greek debt crisis, the tests also incorporated discounts on the value of certain bonds held by banks.