Spain's troubled banks could need as much as €62 billion ($78.76 billion) in new capital to withstand future economic shocks, independent auditors have calculated.
Presenting the results of the auditors' reports into the country's struggling financial sector, Deputy Bank of Spain Governor Fernando Restoy noted that this worst-case scenario was far below the €100 billion ($127.04 billion) loan lifeline offered by the 17 countries that use the euro.
The studies, carried out by auditors Roland Berger and Oliver Wyman, covered 14 banking groups that account for 90 percent of the sector in Spain. The country will use the reports' findings to decide how big a bailout loan to ask for .
Spain's banking sector is struggling under toxic loans and assets from the collapse of the country's property market in 2008. Concerns that Spain could not afford the cost of propping up its banks without the help of an international bailout has sent its borrowing costs soaring to levels not seen since it joined the European single currency in 1999.
Restoy and Deputy Economy Minister Fernando Jimenez Latorre declined to outline individual banks' needs.
In the auditors' stress test for the worst-case economic scenario, most of the banks were deemed to be in a "comfortable" position, Restoy said.
Economy Minister Luis de Guindos, in Luxembourg with eurozone colleagues to discuss Spain's aid request, said a formal request for aid would be made within few days. Eurozone finance ministers offered Spain a bailout loan of up to €100 billion on June 9. The terms of the loan — for which Spain, rather than banks, which ultimately be responsible for — still have to be negotiated.
Oliver Wyman Inc, gave a worst-case range of €51 billion-€62 billion in new capital needs while Roland Berger Strategy Consultants GmbH gave a single figure of €51 billion.
© Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.