European Banks Show Improved Results in Pivotal Stress Test for Payouts

Most European banks emerged stronger from a stress test on how they would weather a sharp economic downturn, giving them a sound footing to continue paying dividends and buying back shares.

On aggregate, the 70 lenders in the test saw their key capital-ratio slide by 4.59 percentage points to 10.4% under an adverse scenario, the European Banking Authority said in a statement on Friday. That’s less than the 4.85 percentage-point hit in the last exam two years ago, which covered fewer banks.

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