...Sensitive to the Domestic Economy: Low growth prospects for Portugal and a highly indebted private sector constrain the ability of the country's banks to improve their asset quality and generate earnings, putting capitalisation under pressure. Capitalisation is vulnerable to high levels of unreserved impaired loans, although this varies significantly among the banks. Better Stress-Test Result for BCP: Only Banco Comercial Portugues, S.A. (BCP) published the outcome of the ECB stress test in late July, which covered significant banks not included in the EBA stress test. BCP's outcome, with a 6.1% fully loaded common equity Tier 1 (CET1) ratio after three years in the adverse scenario, was a significant improvement from the 2014 EBA comprehensive assessment. This reflected various measures taken by the bank, including divestment of non-core assets and an increase of reserve coverage. CGD and BPI's Capital Sensitivity: Taking BCP's stress-test results and asset quality, profitability and capital...
