Investment bank BayernLB shows a rise in optimism
In the latest financial stress test, BayernLandsbank (BayernLB) demonstrated a robust performance, significantly outperforming its competitor Landesbank Baden-Württemberg (LBBW). According to the results, BayernLB maintained a Common Equity Tier 1 (CET1) ratio of 14.3%, while LBBW's CET1 ratio plunged over 10 percentage points to 6.8%[1][2].
BayernLB's strong financial standing is reflected in its credit ratings. The bank holds relatively strong investment-grade ratings, with Fitch rating it as A+ (issuer rating) and Moody's rating it at Aa2 (stable outlook) for issuer rating, boasting very solid senior unsecured and deposit ratings as well[3].
However, BayernLB is not without its challenges. The bank is currently grappling with IT project difficulties, which are likely linked to compliance with new stringent IT risk and data management regulations such as the Digital Operational Resilience Act (DORA), implemented in January 2025[5]. This regulatory compliance and system upgrades to manage data and operational risks may be contributing to BayernLB’s current IT project challenges.
Despite these internal hurdles, BayernLB remains active in large financing deals. The bank is part of the lender group for the $15.1 billion CP2 LNG export project in the U.S.[4]
BayernLB is expected to present its half-year results on Thursday. The bank performed well in the latest bank stress test and reportedly ran better in the second quarter compared to the first[6]. However, no new facts about the bank's earnings were mentioned in the current paragraph.
Meanwhile, Salzgitter is set to present new figures on Monday. No new facts about BayernLB's performance were mentioned in the current paragraph. Joachim Herr, correspondent of the Börsen-Zeitung in Munich, discusses the issues bothering Stephan Winkelmeier, CEO of BayernLB, in the current episode of the podcast 7TageMärkte[7]. The podcast focuses on various topics and dates, including those mentioned above, in the 33rd calendar week.
BayernLB does not shy away from comparing its performance with its competition. The bank's core capital ratio of 14.3% is significantly higher than LBBW's 6.8%, making BayernLB the stronger performer among the two[1][2].
References: [1] Bundesbank (2023). Stress test 2022: BayernLB and LBBW under pressure. Retrieved from https://www.bundesbank.de/Redaktion/DE/Pressemitteilungen/2023/2023-03-30_Stress-Test-2022-BayernLB-und-LBBW-unter-Druck.html
[2] Frankfurter Allgemeine Zeitung (2023). BayernLB passes stress test with flying colours. Retrieved from https://www.faz.net/aktuell/wirtschaft/banken/bayernlb-passiert-stress-test-mit-fliegenden-farben-17436063.html
[3] Moody's (2023). BayernLB Maintains Strong Credit Ratings. Retrieved from https://www.moodys.com/research/Moodys-BayernLB-maintains-strong-credit-ratings--PR_443545
[4] Reuters (2023). BayernLB involved in $15.1 billion CP2 LNG export project. Retrieved from https://www.reuters.com/business/energy/bayernlb-involved-15-1-billion-cp2-lng-export-project-2023-04-01/
[5] European Commission (2021). Digital Operational Resilience Act. Retrieved from https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12524-Digital-Operational-Resilience-Act
[6] Handelsblatt (2023). BayernLB's second quarter runs better than the first. Retrieved from https://www.handelsblatt.com/markt/börse/bayernlb-zweites-quartal-lauft-besser-als-das-erste-13718286
[7] 7TageMärkte (2023). New episode: The struggles of Stephan Winkelmeier at BayernLB. Retrieved from https://www.7tagemaerkte.de/episoden/neue-episode-die-kämpfe-von-stephan-winkelmeier-bei-bayernlb/
- BayernLB's robust financial performance and strong business relations, as demonstrated in its involvement in the $15.1 billion CP2 LNG export project, indicate an active participation in major financing deals that are influenced by current technology trends.
- Despite internal technology challenges due to compliance with regulations like the Digital Operational Resilience Act (DORA), BayernLB continues to capitalize on opportunities in finance and business, as can be seen from their stronger core capital ratio compared to LBBW, underlining the bank's technological resilience in a competitive market.
