The Dutch central bank plans to charge six lenders, including ING Groep NV (INGA) and Rabobank Groep, as much as 61.7 million euros ($85 million) for costs it will incur in performing health checks ordered by the European Central Bank.
The exams, including an asset quality review, stress test and risk analysis, will lead to costs of between 42.5 million euros and 61.7 million euros, the Amsterdam-based central bank said in a letter to the Dutch finance ministry dated March 20. The costs will be passed to the banks under review, according to the letter published on the ministry’s website today.
Based on information gathered from other supervisors, the estimate is “relatively comparable to the costs in some other countries with significant banking industries,” the central bank said. The ECB is preparing to take over banking supervision in November.
The Dutch regulator said it was difficult to compare costs as countries are reluctant to share the information and there are differences in the scope of the reviews and internal staff that can be assigned. To restrain the financial burden, the Dutch central bank agreed with the ECB to limit the maximum number of loan portfolios and credit files to be reviewed, while ensuring the probe offers sufficient certainty.
In the Netherlands, more than 90 percent of the industry will fall under direct ECB oversight. ING Groep’s banking arm, Rabobank and ABN Amro Group NV, the three biggest Dutch lenders, will be probed, as well as SNS Reaal NV’s banking unit, Bank Nederlandse Gemeenten, Nederlandse Waterschapsbank NV and Royal Bank of Scotland NV.
The range in potential costs results from “uncertainties” in the project, including the number of credit files to be reviewed and collateral assessed, the central bank said.