The Spanish banking sector will need between €51bn and €62bn in order recapitalize, according to the consultants Oliver Wyman and Roland Berger, the deputy governor of the Bank of Spain, Fernando Restoy, said. 

Oliver Wyman sets this range depending on various factors, while Roland Berger specifies an exact amount of €51.8bn.

These numbers only include financial aid to the four banks that have been nationalized, Bankia, CatalunyaCaixa, NovaGalicia and Banco de Valencia, while the three largest banks don’t need additional capital even in the most stressful scenario.

The other entities in the sector are in an “intermedium” situation. They will be allowed to raise capital on their own. If they are unable achieve it, however, they will receive aid, although it will lower amounts. The entities will have nine months from September to raise the capital.

Less than promised EU aid

State Secretary for Economy Fernando Jiménez Latorre pointed out that these numbers are “manageable and much lower than the backstop” of €100bn, which is the amount of the credit line promised by the European Union.

Moreover, he said, new budget plans to specify the capital shortage of each entity will be done in September. Once these are defined, the entities will have to present their recapitalization plans within two weeks. After that, they will have a nine-month period to achieve it. The nationalized entities can request the money from this moment without waiting for the new budget plan.

This article was translated and edited by Stina Lunden.