Ten banks to fail European stress tests-Goldman

* Goldman survey suggests 10 banks to fail stress test

* Poll expects banks to raise 37.6 bln euros after tests

LONDON, July 23 (BestGrowthStock) – Ten out of the 91 banks
subjected to Europe’s stress tests are expected to fail,
according to a survey of investors conducted by Goldman Sachs
(GS.N: ).

In an effort to calm investors’ jitters over the potential
impact of the euro zone debt crisis on Europe’s banking system,
banking regulators are assessing how 91 banks across Europe
would cope with another economic downturn, and the results are
set to be published at 1600 GMT on Friday.

The Goldman Sachs poll of 376 respondents, including hedge
funds and long-only investors, showed European banks were on
average expected to raise 37.6 billion euros ($48.4 billion) in
extra capital following the tests, Goldman said in a note dated
July 22.

Goldman said 9 percent of respondents expected a capital
hike of less than 10 billion euros, 33 percent expect a hike of
10 to 25 billion euros, 35 percent expect a hike of 25 to 50
billion euros, 18 percent expect a capital increase of 50 to 100
billion euros and 5 percent expect a hike of more than 100
billion euros.

Banks domiciled in Spain, Germany and Greece were expected
to raise the most fresh capital, and the source of capital was
expected to be split between the public and private sector,
Goldman said.

More than 60 percent of the respondents believed the amount
of capital raised would leave banks adequately capitalised,
while the rest saw a capital deficit remaining.

However, opinions were split on the performance of the
sector in the three months following the test, with 38 percent
expecting outperformance, 26 percent underperformance and 36
percent in-line performance, it said.

The Stoxx Europe 600 banking sector index (.SX7P: ) was down
0.4 percent by 0724 GMT, when the pan-European FTSEurofirst 300
(.FTEU3: ) index was down 0.1 percent.

Investment

(Reporting by Dominic Lau; Editing by Greg Mahlich)
($1=.7766 euros)

Ten banks to fail European stress tests-Goldman