FinecoBank S.p.A. and AS LHV Group. Both banks were classified as significant and are therefore now directly supervised by the ECB.
Supervisors carry out AQRs to review banks’ asset valuations from a prudential perspective, increase transparency regarding their exposures and assess the adequacy of their capital levels. They take each bank’s AQR results into account in the Supervisory Review and Evaluation Process, which assesses a bank’s individual risk profile.
The AQRs for FinecoBank and LHV Group focused on credit risks. FinecoBank’s AQR covered residential real estate and other retail portfolios, while LHV Group’s AQR included small and medium-sized enterprises and real estate portfolios. For both banks, the portfolios selected represent more than 80% of their credit risk-weighted assets.
The results of the AQRs show that neither bank faces a capital shortfall, as their Common Equity Tier (CET1) ratios do not fall below the 8% threshold retained from previous exercises. A bank’s CET1 ratio is a key measure of its financial soundness. Both banks consented to the results being disclosed.
More detailed results and information on the outcome of this exercise can be found on the ECB’s banking supervision website
