The ECB agreed to special treatment for in its 2016 Europeanbank stress test by factoring in the $4 billion proceeds from the of its stake in a Chinese bank,even though the deal was not completed by the 2015-end cutoff for transactionsto be included, the Financial Times reportedOct. 10.
The special treatment boosted Deutsche Bank's common equityTier 1 ratio under the test's adverse scenario to 7.8% from 7.4%, the newspapersaid. The consideration given to Deutsche Bank was referenced in the footnotesto its results, with none of the other 50 participant banks receiving suchtreatment, the paper said.
The sale of the stake in Hua Xia Bank Co. Ltd. is yet to be completed, althoughthe bank expects to do so by the end of 2016, the report noted.
The ECB told the newspaper that it "treats all banks equally,"although it declined to comment specifically on the approach taken to DeutscheBank. The European Banking Authority, which conducted the test, noted more than20 such one-offs "designed to avoid obvious anomalies in theforward-looking stress test where events have already taken place in2015," although the FT said theremainder of these concessions related to a specific clause regarding"administrative expenses, profit or loss from discontinued operations andother operation expenses."
With respect to Deutsche Bank, however, the disclosureindicated solely that the results included the Hua Xia sale proceeds.