Barclays Share News (BARC)

By Shara Tibken Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Shares of European banks trading in the U.S. were little changed following results of the European stress test, which showed the large majority of the companies passed the examinations. The stress test results, intended to restore trust in the European banking system, showed the 91 banks scrutinized could face EUR566 billion in total potential losses in a deteriorating economic and financial environment. The tests found that seven banks--five from Spain, one from Germany and one from Greece--would need to raise new capital to fortify their finances and weather a potential economic downturn or government bond crisis. Bank stocks hovered between positive and negative territory ahead of the results, with investors waiting to see if the stress tests were enough to quell concern about the banks' stability after a spring of fiscal and financial problems. The stocks were little changed following the results, though the major ADR indexes slipped back into the red after posting gains shortly before the results. The Bank of New York index of ADRs recently fell 0.12% to 123.65, and the European index slid 0.26% to 113.17. Industry and government officials in Greece, Spain and Germany had hinted this week that major banks in their countries will come through the tests without trouble, though some investors worry the tests may not be tough enough to reveal the real health of the European banking system. In a Goldman Sachs survey released Thursday, market watchers expected 89% of banks would pass the tests, with banks based in Spain, Germany and Greece expected to raise the most new capital. Survey participants expected 10 of the 91 banks would fail the tests. All but one of the 14 German banks that participated in European Union-wide stress tests passed the exercise, the German Bundesbank said Friday. Government-owned Hypo Real Estate Holding AG (HRE.YY) was the only bank that failed the test, as expected. U.S.-listed German banks included Deutsche Bank AG (DB, DBK.XE) and Commerzbank AG (CRZBY, CBK.XE), which both passed the test. Deutsche Bank shares recently slipped 52 cents to $63.75, while Commerzbank was up 6 cents at $8.21. All Spanish-listed banks passed, but five of the country's unlisted savings banks, or cajas, failed the test and will have to raise more capital. The E.U. tests covered 27 lenders from Spain, and found the five weakest lenders would see their Tier 1 capital ratios fall below 6% in the event of new sharp deterioration in economic and credit market conditions. U.S.-listed Spanish banks still traded lower following the news, with Banco Bilbao Vizcaya Argentaria SA (BBVA, BBVA.MC) down 4 cents at $12.55 and Banco Santander SA (STD, SAN.MC) down 8 cents at $12.88. Greece's state-owned ATEBank (ATE.AT) said Friday that it failed its stress-test and that it would need to raise EUR242.6 million in new capital. But five other Greek banks that were also tested passed, although Piraeus Bank SA (TPEIR.AT) barely squeezed by. National Bank of Greece SA (NBG, ETE.AT) rose 1 cent to $2.84, but Alpha Bank AE (ALBKY, ALPHA.AT) declined 3 cents to $1.64. Meanwhile, the U.K.'s four banks that underwent a Europe-wide stress test on their balance sheets have passed, the country's financial regulator said. Still, most of the banks' shares declined on the news, with only Royal Bank of Scotland Group PLC (RBS, RBS.LN) trading higher, up 2.3% to $13.99. Barclays PLC (BCS, BARC.LN) slid 6 cents to $18.61, HSBC Holdings PLC (HBC, 0005.HK, HSBA.LN) declined 26 cents to $49.62 and Lloyds Banking Group PLC (LYG, LLOY.LN) fell 1 cent to $3.86. The Bank of France said the country's four major banks had successfully passed, likely suffering only a limited hit to a key metric of their capital adequacy under the worst-case scenario of a severe recession and a new sovereign debt crisis in Europe envisaged by E.U. banking supervisors. BNP Paribas SA (BNPQY, BNP.FR) rose 1% to $32.37, but the results weren't enough to boost shares of Societe Generale SA (SCGLY, GLE.FR), which recently was flat at $9.71. In Italy, all five of the banks undergoing the stress tests passed the examinations. UniCredit SpA (UNCFF, UCG.MI) rose 1.5% to $2.66, but Intesa SanPaolo SpA (ISNPY, ISP.MI) slid 16 cents to $18.55. Ireland's biggest banks, Bank of Ireland PLC (IRE) and Allied Irish Banks PLC (AIB, ALBK.DB), also passed the test, the Irish Central Bank and Financial Regulator said Friday. Both companies added to their earlier-session gains on the news, with Bank of Ireland up 2% to $4.01 and Allied Irish Banks up 2.9% to $2.51. In the Netherlands, its four biggest banks passed the test, including ING Groep NV (ING, INGA.AE), which still traded 1.8% lower at $8.83. The four Swedish banks tested passed by a wide margin, the Swedish Financial Services Authority said Friday. Swedbank AB (SWDBY, SWED-A.SI) edged up 2 cents to $10.75 on light volume. -By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com (Caitlin Nish and Kristina Peterson contributed to this article.) (END) Dow Jones Newswires July 23, 2010 13:09 ET (17:09 GMT)