Loan losses bedevil Lloyds in EU stress tests
UK bank saw largest CET1 decline due to asset impairment of EU-wide sample
Lloyds was projected to suffer the largest capital reduction through loan losses under the European Banking Authority (EBA) stress tests, followed by Santander and Swedbank.
The UK bank projected a 9.6% decrease in its Common Equity Tier 1 (CET1) capital ratio through impairments on financial assets at the end of the three-year adverse scenario drawn up by the EBA, the largest drop of the 48 participants.
Banco Santander estimated its CET1 ratio would deplete by 7.6%, and Swedbank by 7%
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