According to reports made by Oliver Wyman and Roland Berger, hired by the Bank of Spain at the request of the Government, Spanish banks' fund needs amount to €16-25 billon in central scenario and between €51-62 billon in adverse scenario.
In the central scenario, Oliver Wyman considers €16-25 billon as appropriated, while Roland Berger estimates €25.6 billion.
In the adverse scenario, which contemplates a 5.0% drop in activity, a 26.4% fall in housing prices, and a 6.5% accumulated decline in GDP through 2014, Oliver Wyman estimates funds need between €51 and €62 billion, while the second firm forecasts €51.8 billion.
For the analysis, both firms studied independently 14 banks, which aggregate nearly 90% of banking activity in Spain, in a 3-year timeframe.
Most needs, are concentrated in the nationalized entities or in process of being, Bankia, CatalunyaCaixa, Novacaixagalicia and Banco de Valencia, who will have to resort to European money. Three biggest banks do not need capital.
With the reports available, the Spanish government will proceed to the formal request for financial assistance. The EU announced on June 9 it approved as much as €100 billion in a loan to recapitalize Spanish banks. Hence, in the worst scenario, Spain will need €38 billion less than pre-approved by the EU.
These assessments represent the first step as these studies do not reveal how much would each bank will demand, that's will be revealed by reports requested to four major audit firms operating in Spain, Ernst & Young, Deloitte, KPMG and PwC, which will end their work by July 31.
Spanish FinMin Luis de Guindos said earlier Thursday that he expects that the roadmap for banks' recapitalization should be clear by the end of July.