AIB - CEBS STRESS TEST
(Thomson Reuters ONE) -
Allied Irish Banks, p.l.c. ("AIB") [NYSE: AIB] welcomes today's earlier
announcements of the EU wide stress testing exercise co-ordinated by the
Committee of European Banking Supervisors (CEBS) in cooperation with the
European Central Bank and under the supervision of the Central Bank and
Financial Regulator. The now published results confirm that in all scenarios
tested AIB exceeds the threshold of 6% Tier 1 capital adequacy ratio agreed
exclusively for the purpose of the stress testing exercise. As part of the
disclosure process, AIB agreed to outline its sovereign exposures as at 31(st)
March 2010 and this information is appended.
For ease of reference, the results of the AIB stress test are also appended.
-ENDS-
For further information please contact:-
Alan Kelly Catherine Burke
General Manager, Corporate Services Head of Corporate Relations and
Communications
AIB Group AIB Group
Dublin Dublin
Tel: +353-1-6412162 Tel: +353-1-6413894
email: alan.j.kelly(at)aib.ie email: catherine.e.burke(at)aib.ie
Allied Irish Banks plc - July 2010 Stress Test Results
· Allied Irish Banks plc (AIB) was subject to the 2010 EU-wide stress
testing exercise coordinated by the Committee of European Banking Supervisors
(CEBS), in cooperation with the European Central Bank (ECB), and under the
supervision of The Central Bank and Financial Regulator. AIB acknowledges the
outcomes of the EU-wide stress tests.
· This stress test complements the risk management procedures and regular
stress testing programmes set up in AIB under the Pillar 2 framework of the
Basel II, CRD[1] requirements and the 'Implementation of the CRD, 28 December
2008'. It was also additional to the Central Bank and Financial Regulator's
Prudential Capital Assessment Review (PCAR), the results of which were announced
on 30 March 2010[2].
· The exercise was conducted using the scenarios, methodology and key
assumptions provided by CEBS (see the aggregate report published on the CEBS
website[3]). As a result of the assumed shock under the adverse scenario, the
estimated consolidated Tier 1 capital ratio would change to 7.2% in 2011
compared to 7.0% as of end of 2009. An additional sovereign risk scenario would
have a further impact of 0.70 of a percentage point on the estimated Tier 1
capital ratio, bringing it to 6.5% at the end of 2011, compared with the CRD
regulatory minimum of 4%.
· The results of the stress suggest a buffer of 352 EUR mln of the Tier 1
capital would exist at 31 December 2011 against the threshold of 6% of Tier 1
capital adequacy ratio agreed exclusively for the purposes of this exercise.
This threshold should by no means be interpreted as a regulatory minimum (the
regulatory minimum for the Tier 1 capital ratio is set to 4%), 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 CRD.
· AIB has held discussions of the results of the stress test with its
supervisor the Central Bank and Financial Regulator. To be clear AIB's capital
requirements resulting from the PCAR announced on 30 March 2010 were:
(1) An additional ?7.396bn of equity capital to meet the base case target of
7% equity, before taking account of projected asset disposals, and
(2) ?4.865bn of Core Tier 1 capital, less any equity generated under
paragraph 1 excluding conversion of preference shares held by the Government, to
meet the base case target of 8% Core Tier 1. This additional Core Tier 1
capital will also satisfy AIB's stress case target of 4% Core Tier 1.
AIB submitted its capital plan to the Central Bank and Financial Regulator
by the 30 April 2010, as required under the PCAR, which details AIB's plans to
raise the PCAR capital requirements by the 31 December 2010, as required,
through a combination of equity raising and asset disposals.
· The stress test was carried out under a number of key common simplifying
assumptions (e.g. constant balance sheet, uniform treatment of securitisation
exposures). Therefore, the information should in no way be construed as a
forecast nor should it be taken as an update to capital plans. Consequently the
numbers below may differ from numbers published previously by AIB. In addition,
where the information does not reconcile to previously published information
(e.g. annual statements or capital plans), this is a result of supervisory
adjustments applied as part of the methodology of the stress test. In the
interpretation of the outcome of the exercise, it is imperative to differentiate
between the results obtained under the different scenarios developed for the
purposes of the EU-wide exercise. The results of the adverse scenario should not
be considered as representative of the current situation or possible present
capital needs. A stress testing exercise does not provide forecasts of expected
outcomes since the adverse scenarios are designed as "what-if" scenarios
including plausible but extreme assumptions, which are therefore not very likely
to materialise. Different stresses may produce different outcomes depending on
the circumstances of each institution.
AIB - Individual Results
At 31(st) December 2009 EUR mln
---------------------------------------------------------------------
Total Tier 1 capital 8,542
Total regulatory capital 12,316
Total risk weighted assets* 121,605
Pre-impairment income (including operating expenses) 2,294
Impairment losses on financial assets in the banking book -5,380
1 yr Loss rate on Corporate exposures (%)[4] 4.60%
1 yr Loss rate on Retail exposures (%)[4] 0.66%
Tier 1 ratio (%) 7.0%
Outcomes of stress test scenarios
The stress test was carried out under a number of key common simplifying
assumptions (e.g. constant balance sheet, uniform treatment of securitisation
exposures). Therefore, the information relative to the benchmark scenarios is
provided only for comparison purposes and should in no way be construed as a
forecast.
Benchmark scenario at 31 December 2011[5] EUR mln
-------------------------------------------------------------------
Total Tier 1 capital after the benchmark scenario 6,838
Total regulatory capital after the benchmark scenario 11,175
Total risk weighted assets after the benchmark scenario 72,313
Tier 1 ratio (%) after the benchmark scenario 9.5%
Adverse scenario at 31 December 2011[5] EUR mln
--------------------------------------------------------------------------------
Total Tier 1 capital after the adverse scenario 5,305
Total regulatory capital after the adverse scenario 9,642
Total risk weighted assets after the adverse scenario 73,771
2 yr cumulative pre-impairment income after the adverse scenario 901
(including operating expenses)[5]()
2 yr cumulative impairment losses on financial assets in the banking -9,829
book after the adverse scenario[5]
2 yr cumulative losses on trading book after the adverse scenario[5] -20
2 yr Loss rate on Corporate exposures (%)after the adverse 6.11%
scenario[4],[5]
2 yr Loss rate on Retail exposures (%)after the adverse scenario[4],[5] 4.31%
Tier 1 ratio after the adverse scenario (%) 7.2%
Additional sovereign shock on the adverse scenario at 31 EUR mln
December 2011
--------------------------------------------------------------------------------
Additional impairment losses on the banking book after the -606
sovereign shock[5]
Additional losses on sovereign exposures in the trading book -36
after the sovereign shock[5]
2 yr Loss rate on Corporate Exposures after the adverse 6.38%
scenario + sovereign shock (%)[4],[5],[6]
2 yr Loss rate on Retail exposures after the adverse scenario + 4.94%
sovereign shock (%)[4],[5],[6]
Tier 1 ratio after the adverse scenario + sovereign shock (%) 6.5%
Additional capital needed to reach 6% Tier 1 ratio under Nil
adverse scenario + additional sovereign shock, at the end of (surplus of 352)
2011
*Inclusive of CRD transitional floor adjustments
AIB - Group Exposures to central and local governments on a consolidated basis
+----------------+---------------+
| Reporting Date | 31 March 2010 |
+----------------+---------------+
+--------------+------------------+------------+------------+------------------+
|EUR mln |Gross exposures |Of which |Of which |Net exposures |
| |(net of |Banking Book|Trading Book|(net of |
| |impairment) | | |impairment) |
+--------------+------------------+------------+------------+------------------+
|Austria | 90 | 90 | 0 | 90 |
+--------------+------------------+------------+------------+------------------+
|Belgium | 66 | 66 | 0 | 66 |
+--------------+------------------+------------+------------+------------------+
|Bulgaria | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Cyprus | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Czech Republic| 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Denmark | 50 | 50 | 0 | 50 |
+--------------+------------------+------------+------------+------------------+
|Estonia | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Finland | 25 | 25 | 0 | 25 |
+--------------+------------------+------------+------------+------------------+
|France | 845 | 845 | 0 | 845 |
+--------------+------------------+------------+------------+------------------+
|Germany | 525 | 525 | 0 | 525 |
+--------------+------------------+------------+------------+------------------+
|Greece | 41 | 41 | 0 | 41 |
+--------------+------------------+------------+------------+------------------+
|Hungary | 71 | 71 | 0 | 71 |
+--------------+------------------+------------+------------+------------------+
|Iceland | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Ireland | 4,136 | 4,136 | 0 | 4,136 |
+--------------+------------------+------------+------------+------------------+
|Italy | 671 | 671 | 0 | 671 |
+--------------+------------------+------------+------------+------------------+
|Latvia | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Liechtenstein | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Lithuania | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Luxembourg | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Malta | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Netherlands | 228 | 228 | 0 | 228 |
+--------------+------------------+------------+------------+------------------+
|Norway | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Poland | 1,050 | 1,050 | 0 | 1,050 |
+--------------+------------------+------------+------------+------------------+
|Portugal | 257 | 257 | 0 | 257 |
+--------------+------------------+------------+------------+------------------+
|Romania | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Slovakia | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Slovenia | 0 | 0 | 0 | 0 |
+--------------+------------------+------------+------------+------------------+
|Spain | 391 | 391 | 0 | 391 |
+--------------+------------------+------------+------------+------------------+
|Sweden | 30 | 30 | 0 | 30 |
+--------------+------------------+------------+------------+------------------+
|United Kingdom| 1,088 | 1,088 | 0 | 1,088 |
+--------------+------------------+------------+------------+------------------+
--------------------------------------------------------------------------------
[1] Directive EC/2006/48 - Capital Requirements Directive (CRD)as implemented by
SI 660 and 661 of 2006
[2] CB & FR
[3] See:http://www.c-ebs.org/EU-wide-stress-testing.aspx
[4] Impairment losses as a % of corporate/retail exposures in AFS, HTM, and
loans and receivables portfolios
[5] Cumulative for 2010 and 2011
[6] On the basis of losses estimated under both the adverse scenario and the
additional sovereign shock
[HUG#1433924]
Press release: http://hugin.info/133324/R/1433924/379683.pdf
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(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.
All reproduction for further distribution is prohibited.
Source: Allied Irish Banks, p.l.c. via Thomson Reuters ONE
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Datum: 23.07.2010 - 19:28 Uhr
Sprache: Deutsch
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