European banks with strong balance sheets may need to raise additional capital simply to compete with rivals that receive government bailouts, an analyst has predicted, after Erste Bank yesterday accepted a €2.7bn “helping hand” from the Austrian government.

The Erste Bank's capital increase, which will raise its core tier one capital ratio from about 7.5% to 10%, was not part of a rescue package, as the Austrian bank already had one of the strongest balance sheets of the European banks.