By Huw Jones and Steve Slater
LONDON, Oct 26 (Reuters) - A health check of banks acrossthe European Union showed that 24 lenders, all from the eurozone, were too weak to withstand a three-year recession in atest aimed at drawing a line under the single currency's area'sprotracted debt crisis.
Italy's Monte dei Paschi had the biggest capitalhole to fill at 2.1 billion euros even after its money raisingefforts so far this year.
The European Banking Authority (EBA), the EU's bankingwatchdog that coordinated the stress test of 123 banks, said onSunday the lenders that failed to maintain a core capital ratioof 5.5 percent at the end of the test, had a combined capitalshortfall of 24.6 billion euros at the end of 2013.
Italy fared worst with nine of its banks having a totalshortfall of 9.4 billion euros at the end of 2013. Monte deiPaschi had core capital ratio of minus 0.1 percent at the end ofthe three-year test.
Three Greek banks, Eurobank Ergasias, National Bank ofGreece and Piraeus Bank, had a combined shortfall of 8.7 billioneuros. Three lenders from Cyprus had a total capital hole of 2.4billion euros.
Many of the lenders have raised capital since the end of2013 and the total shortfall shrank to 9.5 billion euros across14 lenders by the end of September 2014, EBA said.
The euro zone banks now have two weeks to come up with plansfor plugging any capital holes uncovered by the stress testwithin nine months.
The test has been billed as a make or break moment forEurope's banks after three previous exercises failed to root outweaklings that had to be rescued by EU bailouts.
Continued inability to find weak spots at banks in the eurozone would be particularly damaging to the European CentralBank, which carried out the stress test in the euro zone andbecomes the main banking supervisor in the single currency areafrom next month.
The ECB scrutinised the balance sheets of 130 banks in theeuro zone ahead of the stress test, a higher sample as it alsoincludes subsidiaries of big banks while the EBA test looked atgroup holding companies.
Some 40 banks ended the test with capital ratios of below 7percent, the minimum level required under new global bankcapital rules known as Basel III.
Among the narrow passes were Britain's Lloyds,Italy's Mediobanca and Germany's HSH Nordbank, allbelow 6.5 percent. (Reporting by Huw Jones and Steve Slater)