Czech banks remain resilient in stress tests

PRAGUE: The Czech banking sector's capital adequacy would fall to 10 percent, from around 15 percent now, under the most unfavourable scenario in a central bank analysis, the bank said on Tuesday.

Several banks would have to raise a total of 31.5 billion crowns ($1.64 billion), or 0.8 percent of gross domestic product in the adverse scenario to bring their capital adequacy to above the central bank's 8 percent regulatory threshold.

That scenario included a 50 percent write-down of the exposure of the five largest banks to their foreign parent groups, as well as impairment on exposure to EU countries whose debt exceeds 60 percent of GDP.

The largest Czech banks are units of Austria's Erste Group , Belgium's KBC, France's Societe Generale and Italy's UniCredit.