MARKET TALK: UK Banks Open Up After Passing EU Stress Tests

26th Jul 2010 08:11

0711 GMT [Dow Jones] UK banks all passed the EU-wide stress tests Friday. However, "the static balance sheet limitations along with the absence of important factors such as regulatory changes make the results less meaningful, especially for UK banks that will see significant restructuring," says JPMorgan Cazenove. Adds that a pass for UK banks was already expected post the FSA stress tests in 2009, and this test highlighted that UK banks would have no capital issues. Moreover, "this was more of a European exercise intended to reassure the market and so the same challenges in terms of higher funding costs, need to delever and balance sheet restructuring remain," adds JPMorgan Cazenove. Royal Bank of Scotland (RBS.LN) shares +2% at 46p, Barclays (BARC.LN) +2.8% at 310p and Lloyds Banking Group (LLOY.LN) shares +2% at 65p. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] (END) Dow Jones Newswires July 26, 2010 03:11 ET (07:11 GMT)