Five Spanish Banks Fail Stress Test With $2.2 Billion Shortfall

Five Spanish lenders, including Banco Pastor SA and Caja de Ahorros del Mediterraneo, failed this year’s round of European Union stress tests after regulators found they didn’t have enough capital to withstand a recession scenario.

Unnim and CatalunyaCaixa, two Catalan savings banks groups, and Grupo Caja3 also failed the tests under the main results category set by the European Banking Authority, according to results published on the websites of Spain’s commercial and savings banks associations. The banks, which were short a combined 1.56 billion euros ($2.2 billion) of capital, according to the EBA, won’t need to raise funds because they have extra reserves and bonds that convert into shares to absorb losses, the Bank of Spain said.