Ahead of New Rules, Europe’s Banks Go on a Selling Spree – NYTimes.com
LONDON — Europe’s banking sector is ready for a shake-up as its largest financial institutions try to slim down their operations in response to the sovereign debt crisis.
Banco Santander, Deutsche Bank and others are trying to sell assets and loan portfolios to reduce their exposure to worrisome private and sovereign debt as part of a broad strategy to refocus on their home markets and comply with new regulatory requirements.
It is an extraordinary fire sale.
Europe’s financial sector is expected to sell or write down more than $1.8 trillion in loan assets in the next decade, according to the consulting firm PricewaterhouseCoopers. That compares with just $97 billion from 2003 to 2010.
“The list of asset sales is the longest I’ve seen in 10 years,” said Richard Thompson, a partner at PricewaterhouseCoopers in London, who added that the final figure could rise well above $1.8 trillion. “Banks want to reshape their balance sheets to focus on specific territories or sectors.”
Sales are already under way. Last week, Ireland’s nationalized Anglo Irish Bank sold $3.3 billion in commercial real estate loans in the United States to Wells Fargo. In all, the Irish bank wants to offload nearly $10 billion in American loans as part of a government requirement to reduce its assets and trim its operations.
In debt-ridden Spain, Banco Santander and BBVA, the country’s largest financial institutions, as well as a number of struggling savings banks are also lining up buyers for their loan portfolios.
Strange Random Banking Quote:
“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford, founder of the Ford Motor Company.
- From Mish: Banks Create New Rules to Show they are Already “Well Capitalized”; Magic Spreads at Lightning Speed (jhaines6.wordpress.com)
- Financial Alchemy Foils Capital Rules as Banks Redefine Risk (businessweek.com)
- End Bonuses for Bankers – NYTimes.com (mbcalyn.com)
- Equity Update: Earnings season keeps supporting stocks (tradingfloor.com)
- Banco Santander Q3 profit up 10 percent (seattletimes.nwsource.com)
- Europe Tries To Recapitalize Banks Without Injecting Capital (businessweek.com)
- Banco Santander Q3 profit up 10 percent (seattlepi.com)
- Meet Some of Europe’s Top Financiers (businessinsider.com)
Posted on November 11, 2011, in Article and tagged Anglo Irish Bank, Banco Bilbao Vizcaya Argentaria, Bank, Deutsche Bank, Ford Motor Company, Grupo Santander, United States, Wells Fargo. Bookmark the permalink. Leave a comment.