2014 EU-wide Stress Test Summary for LV - ABLV Bank, AS
Core Information
Bank Name: LV - ABLV Bank, AS
LEI Code: 549300IHIJ7SCANBWN17
Country: Latvia
Stress Test Period: 2014 EU-wide Stress Test
Reporting Date: 31 December 2013
Summary of Adverse Scenario (as of 31 December 2016)
Metric
Value (min EUR, %)
3 yr cumulative operating profit before impairments
71
3 yr cumulative impairment losses on financial and non-financial assets in the banking book
76
3 yr cumulative losses from the stress in the trading book
11
Valuation losses due to sovereign shock after tax and prudential filters
1
Common Equity Tier 1 capital
128
Total Risk Exposure
1,669
Common Equity Tier 1 ratio, %
7.7%
Memorandum Items
Common EU wide CET1 Threshold (5.5%) – 92
Total amount of instruments with mandatory conversion into ordinary shares (cumulative conversions) – 0
Total Additional Tier 1 and Tier 2 instruments eligible as regulatory capital under the CRR provisions – 0
Eligible instruments whose trigger is above CET1 capital ratio in the adverse scenario – 0
Summary of Baseline Scenario (as of 31 December 2016)
Metric
Value (min EUR, %)
3 yr cumulative operating profit before impairments
115
3 yr cumulative impairment losses on financial and non-financial assets in the banking book
32
3 yr cumulative losses from the stress in the trading book
6
Common Equity Tier 1 capital
173
Total Risk Exposure
1,641
Common Equity Tier 1 ratio, %
10.5%
Memorandum Items
Common EU wide CET1 Threshold (8.0%) – 131
Risk Exposure and Provisions (as of 31 December 2013)
Baseline Scenario
Exposure Type
2014
2015
2016
Impairment rate
0.09%
0.09%
0.09%
Stock of Provisions
1
1
2
Coverage Ratio - Default Stock
42.90%
42.90%
42.90%
Adverse Scenario
Exposure Type
2014
2015
2016
Impairment rate
0.24%
0.23%
0.22%
Stock of Provisions
2
3
5
Coverage Ratio - Default Stock
43.16%
43.17%
43.17%
Risk Exposure by Sector (as of 31 December 2013)
Baseline Scenario
Sector
Exposure (F-IRB)
Exposure (A-IRB)
Exposure (STA)
Non-defaulted
0
0
0
Defaulted
0
0
0
Central banks and central governments
0
0
0
Institutions
0
0
0
Corporates
0
0
0
Corporates - Of Which: Specialised Lending
0
0
0
Corporates - Of Which: SME
0
0
0
Retail
0
0
0
Retail - Secured on real estate property
0
0
0
Retail - Secured on real estate property - Of 50.0%
0
0
0
Retail - Secured on real estate property - Of 104.0%
0
0
0
Retail - Qualifying Revolving
0
0
0
Retail - Other Retail
0
0
0
Retail - Other Retail - Of Which: SME
0
0
0
Retail - Other Retail - Of Which: non-SME
0
0
0
Equity
0
0
0
Securitisation
0
0
0
Other non-credit obligation assets
0
0
0
TOTAL
0
0
0
Adverse Scenario
Sector
Exposure (F-IRB)
Exposure (A-IRB)
Exposure (STA)
Non-defaulted
0
0
0
Defaulted
0
0
0
Central banks and central governments
0
0
0
Institutions
0
0
0
Corporates
0
0
0
Corporates - Of Which: Specialised Lending
0
0
0
Corporates - Of Which: SME
0
0
0
Retail
0
0
0
Retail - Secured on real estate property
0
0
0
Retail - Secured on real estate property - Of 52.0%
0
0
0
Retail - Secured on real estate property - Of 107.0%
0
0
0
Retail - Qualifying Revolving
0
0
0
Retail - Other Retail
0
0
0
Retail - Other Retail - Of Which: SME
0
0
0
Retail - Other Retail - Of Which: non-SME
0
0
0
Equity
0
0
0
Securitisation
0
0
0
Other non-credit obligation assets
0
0
0
TOTAL
0
0
0
Summary of Germany's Data
Baseline Scenario
Exposure Type
2014
2015
2016
Impairment rate
0.01%
0.01%
0.01%
Stock of Provisions
0
0
0
Coverage Ratio - Default Stock
41.08%
41.08%
41.08%
Adverse Scenario
Exposure Type
2014
2015
2016
Impairment rate
0.07%
0.07%
0.07%
Stock of Provisions
0
0
0
Coverage Ratio - Default Stock
44.15%
44.15%
44.15%
Key Observations
Capital Adequacy: The CET1 ratio decreased from 9.8% to 7.7% in the adverse scenario, indicating a significant capital erosion under severe conditions. In the baseline scenario, it remained stable at 10.5%.
Profitability: Operating profit before impairments increased in both scenarios, but impairment losses rose more significantly in the adverse scenario.
Risk Exposure: Total risk exposure increased in the adverse scenario, reflecting higher potential losses.
Provisions and Coverage Ratio: The coverage ratio for default stock remained relatively consistent across years, suggesting a stable provisioning strategy.
Sectoral Impact: The data indicates that risk exposure and provisioning were minimal across all sectors, with no significant losses reported in the baseline or adverse scenarios for Germany.
