Helaba Landesbank Hessen-Thüringen successfully passes the Europe-wide stress test for 91 banks coordinated by the European Banking Authority (EBA). The Core Tier-1 Ratio calculated for Helaba in the adverse scenario amounts to 6.8 per cent at the end of 2012. This result incorporates the measures for restructuring and adapting the silent participations to the Basel III criteria, which were agreed upon with legally binding effect and publicly announced on 28 April 2011 by the owners of Helaba. Thus, the result achieved by Helaba in the stress test is significantly above the minimum threshold value of 5 per cent determined by the EBA. The stress test result of Helaba demonstrates that the bank does not have any problem as regards its assets side in any of the stress test scenarios. The result is clear evidence that Helaba is able to cope with the market disruptions assumed in the stress scenario.
Hans-Dieter Brenner, CEO of Helaba Landesbank Hessen-Thüringen says, that the non-recognition of the Undertaking of the State of Hessen to harden the silent participations, which was communicated at short notice by the EBA, is not understandable: "Upon the authorisation of the Hessian Minister of Finance by the State Government to harden the silent participation as "additional core capital" in accordance with Basel III as well as the public and legally biding announcement of the measure at the end of April 2011, we had fulfilled all of the required formal prerequisites for passing the stress test. Until the end of June, there were no indications that the EBA would not take the resolved measures into account in the stress test. We therefore decided to authorise the EBA only to publish the Templates as correctly completed by us. This is no criticism of the scenarios on which the stress test has been based. Our concern exclusively refers to the definition of Core Tier-1 Capital that has been taken as the basis and which, without any legal justification, results in the cut of our Core Tier-1 Capital by almost 50 per cent.
After it had become known that the EBA would deviate in the stress test from currently valid and applicable provisions of supervisory law, the owners of Helaba on 20 April agreed to take all necessary steps to ensure that Helaba would pass the stress test successfully. The State of Hesse accordingly undertook, by a resolution of the Government Cabinet of 28 April 2011, to restructure and adapt its silent participation in the amount of EUR 1.92 billion at market terms and in compliance with EU state aid rules to the "Core Tier-1 Capital" criteria. Upon the implementation of the announced measures, Helaba fulfills the future requirements of Basel III in full and without availing itself of transitional periods. Moreover, a time schedule for the implementation of the restructuring and adaptation of the silent participations was made available to the EBA. The Authority thereupon confirmed that the measures that had been resolved were sufficient for inclusion the stress test. Only at the end of June, there were first indications that the EBA had again changed its approach. On 8 July, the Authority demanded the submission of draft agreements on the hardening of the silent participation of the State of Hesse. The Hessian Ministry of Finance complied with this demand on 11 July. Thereupon, the EBA declared on 12 July that a qualitative examination of the draft agreements would be required, which it was unable to perform in time before the publication of the test results. This is why EBA communicated that it was not in a position to accept the Templates provided by Helaba within the scope of the EBA stress test and not to publish them under the responsibility of the EBA. Brenner further stated: "It is not understandable that the EBA in its calculations does not take into account fully liable capital, which has been fully acknowledged by the supervisory authorities, which has been reported in the balance sheet for 10 years and which will be eligible in accordance with the criteria of Basel III by the end of 2011, thus – without necessity – to jeopardize a healthy and sound bank such as Helaba."
Helaba presents its best semi-annual Result ever
The Bank saw its positive earnings trend continue during the first half of 2011. According to preliminary figures, the Helaba Group in the first half of 2011 generated the best semi-annual result since the formation of the Bank, amounting to approximately EUR 325 million before taxes (in the year before, EUR 129 million). Operating income developed positively. At the same time, risk provisioning is on the decline, even though Helaba has written down its exposure to Greece in full to present market values. The administrative expenses take into account the strain from the banking levy.
