BLOOMBERG ARE REPORTING that Permanent TSB has failed European Central Bank Stress tests and will need additional capital of between €700 million to €800 million.
Extra funding for the state-owned bank would not necessarily come from the taxpayer but Permanent TSB’s failure of the tests is the first such failure by an Irish bank.
Bloomberg say that the results will be officially announced on Sunday but that a source has told them that Permanent TSB failed the most extreme stress test case.
The bank will now have two weeks to formulate a plan about how to raise funds with it being highly likely that that they will seek to raise the additional capital on the stock market.
The ECB stress tests place a bank’s finances under a series of hypothetical scenarios to see if they would cope would adverse economic conditions.
In its latest results, Permanent TSB recorded a half-year loss of €171 million, a 62% decrease on the operating loss it recorded in the previous year.
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