Deutsche Bank believes some Portuguese banks could be in trouble and said it had made the right adjustments to its exposure to Portugal, Ireland, Italy and Greece.
Chief risk officer Hugo Baenziger said he thought the bulk of other European banks were set to pass a second round of stress tests currently underway.
Baenziger said the bank's exposure to sovereign debt of Portugal, Ireland, Italy and Greece was "relatively low."
"You don't need stress tests to know that Greek, Irish and possibly Portugal banks are in trouble," Baenziger said on Thursday, adding "the market already knows this."
Portuguese banks have been squeezed out of the interbank credit market by Portugal's sovereign debt crisis and many analysts say they need to raise their capital ratios to cope with the difficult environment and reduce their reliance on European Central Bank funds.
Fitch Ratings said on Wednesday it had taken negative rating actions on seven Portuguese banks and their subsidiaries
Baenziger was speaking on a panel at a Berlin banking congress.
Europe is readying itself for a renewed round of so-called stress tests as a way to gauge the financial health of Europe's financial sector.
by Edward Taylor and Christiaan Hetzner.
source: Reuters
