European banks who only just scraped through a health check could look for over 25 billion euros in new capital, while Spain's smaller lenders set out to reassure investors on Monday that they too can raise funds.
Of the 91 banks tested, seven failed, including five from Spain, and another 17 barely passed the EU tests which have been widely criticised as not demanding enough.
The tests were aimed partly at opening the door to funding markets for a batch of southern European banks and lowering costs for other lenders, and analysts said it would make sense for banks to seek to raise the capital they would have needed had the test criteria been tougher.
Those that are at the margin may as well raise equity to dampen down fears ... The sums of money involved are really relatively small, said Ian Henderson, who runs a global financials fund for JP Morgan.
We can navel gaze until we're blue in the face about this (stress test process). Most people are going to be absolutely fine.
Results announced on Friday showed the seven that failed need to raise just 3.5 billion euros ($4.5 billion), far less than expected.
But if the minimum pass mark had been set at a Tier 1 capital ratio of 8 percent, rather than 6 percent, banks would have needed an extra 27 billion euros ($35 billion), analysts at Morgan Stanley estimated. About 40 percent of that would have been for German and Italian banks.
A 7 percent hurdle rate would have meant an extra 8 billion euros.
Or if losses on sovereign debt that banks are assumed to hold to maturity were included -- as critics said should have happened -- then 23 banks would have failed, needing 15.5 billion euros, according to analysis by Reuters BreakingViews.
The Spanish Confederation of Savings Banks (CECA) said its smaller regional savings banks, known as cajas, would be able to raise capital this year if needed, as it kick-started a roadshow in London aimed at reassuring investors.
There is a lot of interest, Jorge Gil, managing director of CECA told Reuters Insider.
The timeframe is pretty much anticipated to be within the year 2010. The raising of the equity should be in the coming months, it should be pretty quick.
Credit markets showed an improvement in banks' funding costs, but the real test will come when second and third tier banks try to move away from dependency on central bank funding.
Europe's banking index was up 0.4 percent in a generally weaker stock market by 9:50 a.m. ET while the euro, driven last month to below $1.19, its lowest since 2006, was little changed on the day at around $1.29.
Analysts said while the test generally underwhelmed, the level of detail on holdings was a boon and could help Europe achieve its aim of repeating the boost given to U.S. banks early last year from a health check on that sector.
Even some U.S. banks to pass that test raised cash to reassure investors, analysts noted.
German banks, including Deutsche Bank, were criticised for not providing as much information as rivals about their exposure to sovereign debt in the euro zone -- the major worry that prompted the tests. Shares in Deutsche Bank, which also owns just under 30 percent of Postbank, were down 1 percent, the weakest of the top names.
Some of the banks to squeak past the official test are already making strides to raise capital, including Italy's Banca Monte dei Paschi di Siena and Banco Popolare, so they are unlikely to need more government aid.
Deutsche Postbank, Germany's largest retail bank by clients, said it will continue with a plan to rebuild capital, included halting dividends.
As for the Spanish cajas, their problems have long been flagged and are being remedied, led by the government.
European banks have already raised about 300 billion euros since the start of the crisis -- including 34 banks taking 170 billion euros from governments -- whereas the U.S. tests were conducted much earlier in the cycle and kick-started the fundraising.
The subdued response to the tests in Europe was a far cry from early May when global markets feared Greece's debt crisis might spread like wildfire through Europe and beyond.
Stronger-than-expected economic data suggesting the euro zone will avoid a double-dip recession, despite fiscal austerity measures, have also helped revive investor confidence in Europe.
The credit market, which partially froze at the height of the euro zone debt crisis and has remained tight on fears banks have been hiding exposures, reacted positively. The Markit iTraxx European senior financials index tightened by 5 basis point to 126, compared to 164 at the start of the month.
Investors chastised EU authorities for refusing to test the impact of a debt default by Greece. But European Central Bank governing council member Christian Noyer said euro zone states have put several hundreds of billions of euros on the table with the support of the IMF to make this hypothesis completely excluded.
(Additional reporting by Steve Slater, Bill Tarrant, Alex Chambers, Ian Simpson, Paul Taylor; Editing by Ruth Pitchford)