Italian banks during 2014 have shown increased interest and market confidence, a senior analyst of rating agency Dagong Europe said on Monday commenting on European asset quality review and stress test.

Carola Saldias, senior director of the financial institutions analytical team at the European branch of Chinese rating agency Dagong Global Credit Rating Co. Ltd, said Italian banks in 2014 raised a total of 11.2 billion euros (about 14.2 billion U.S. dollars) through fresh capital and contingent capital notes issuances (CoCos).

Earlier this week, the European Central Bank (ECB) and the European Banking Authority (EBA) published the outcome of their comprehensive assessment. Of a total of 130 participating banks, 25 institutions were identified as being in need of capital.

However, 12 had already raised enough capital since the beginning of the year, anticipating the potential outcome of the review to reach the required capital threshold.

The remaining 13 banks, which were found to be in need of capital, need to raise on aggregate 9.5 billion euros.

Overall, the largest group of banks was from Italy, with 3.3 billion euros outstanding through four institutions, Saldias noted.

She elaborated that the channels employed to strengthen capital levels have varied, combining fresh equity and CoCos, internal capital generation as well as de-leveraging and de-risking initiatives.

Banks in peripheral countries, which are significantly affected by the pace of the economic recovery and are still struggling to enter a sustainable economic growth, were among those in major need of raising capital as a result of the asset quality review.

Saldias said that Dagong Europe awaits the publication of the restructuring downsizing plan presented by Italian banks, considering that capital increases through market issuances could be challenging due to time constraints. (1 euro = 1.27 U.S. dollars) Endit

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