Tesco’s profits for the first six months of 2014 have been nearly wiped out by the toxic combination of the recent accounting scandal and slumping sales at its declining UK store empire, The Guardian reported. In another dark day for the supermarket giant, the accounting fiasco claimed the scalp of chairman Sir Richard Broadbent and the company said it was withholding million-pound payoffs to its former chief executive Philip Clarke and finance director Laurie McIlwee until an investigation into its mis-stated accounts by the City watchdog was complete.

European banks are likely to need about €10 billion ($12.6 billion) to address shortages of capital identified in a regulatory review, an amount modest enough to cheer markets, investors and analysts say, The Wall Street Journal reported. On Thursday, European regulators planned to privately disclose to around 150 lenders the results of a “stress test” designed to measure the strength of their balance sheets and their ability to survive a deteriorating economic environment.

CSA Czech Airlines said that its key shareholder Korean Air Lines Ltd. has agreed to inject fresh capital into the country’s flagship carrier as it seeks to overcome its current financial struggles, The Wall Street Journal Emerging Europe blog reported. “The offered sum is within expectations of CSA laid out in the company’s restructuring plan,” CSA Czech Airlines’ spokesman Daniel Sabik told the Wall Street Journal Thursday, referring to the required maximum financing needs that in September were estimated at about $20 million.

Irish state-owned lender Permanent Tsb (PTSB) is selling a portfolio of mostly bad mortgage loans with a gross value of 468 million euros ($594 million) ahead of European stress tests that could require it to boost its capital, Reuters reported. PTSB said on Wednesday the mortgages, which includes 350 million euros of non-performing loans, were being sold by wholly owned-subsidiary Springboard to a company called Mars Capital Ireland No.2 Limited.

Bulgaria's central bank will have to revoke the licence of Corporate Commercial Bank (Corpbank) unless the Balkan country changes its laws, the central bank's spokesman told Reuters on Wednesday. Under current laws, if a bank's capital is negative, the central bank should withdraw the bank's licence, shut its operations and seek its bankruptcy within five working days. "Under current legislation the Bulgarian National Bank has no other option but to revoke the bank's licence.

The eurozone's unprecedented tests of its biggest banks' financial health will fail at least 11 institutions - almost a tenth of the 130 banks being tested by the ECB, The Telegraph reported. According to the Spanish newswire EFE, banks across six countries have failed the European Central Bank's stress tests, the results of which will be released on Sunday. The identities of the banks are unknown, but they are mainly in the eurozone's struggling states, in particular Greece and Italy.

Permanent TSB, which is 99.2 per cent owned by the State, is expected to announce details of its capital-raising plan on Sunday after the European Central Bank publishes the results of its pan-European comprehensive assessments, which PTSB is expected to fail, the Irish Times reported. It is not clear how much capital PTSB will be required to raise but the expectation is it will be below €1 billion.

HSBC Holdings Plc (HSBA) Chairman Douglas Flint said separating his bank’s securities arm from its consumer unit may cost as much as 2 billion pounds ($3.2 billion), Bloomberg News reported. “Ringfencing will cost one billion, two billion to implement, which is a structural separation that is going to be very expensive,” Flint told the House of Lords’s European Union Economic and Financial Affairs Subcommittee in London today. British lenders must build firewalls between their consumer and investment banks by 2019 to meet rules proposed by John Vickers’s Independent Commission on Banking.

Regulators in Portugal and Britain have temporarily banned short-selling of Portugal Telecom’s stock after the company’s shares declined to a record low on Monday over its exposure to a company with ties to the Espírito Santo family, the International New York Times DealBook blog reported. The Portuguese securities regulator, the Comissão do Mercado de Valores Mobiliários, temporarily restricted short-selling of Portugal Telecom late Monday, citing the company’s 10 percent drop in its share price that day.

The European Union’s banking watchdog has warned that Bulgaria’s authorities have breached European law by continuing to block depositors’ access to their money at a large troubled lender the government seized four months ago, the International New York Times reported. The warning comes after a run on deposits forced the lender, Corporate Commercial Bank, to close in June, leaving tens of thousands of consumers and businesses without access to their cash in the European Union’s poorest member state.