Care should be taken nonperforming loans and corporate debt load.
Shares of Deutsche Bank came to fall more than 10% last traded week. File photo: Reuters
The International Monetary Fund (IMF) acknowledged concern about the slump in the shares of European banks, they reflect deteriorating expectations for the future of the European Union (EU).
Gerry Rice, a spokesman for the agency, said at a press conference that it is important that the authorities in that region promote consolidation of the balance sheets of its banks .
it also stated that only the tightening of supervision, improve frameworks for resolving insolvencies and the development of markets for nonperforming loans charged by banks for remnants of their customers.
For the week, the largest European banks sector, the German Deutsche Bank; Societe Generale, France; Zurich Insurance Group in Europe and Italy Roo Tinto Group presented its financial statements in which predominated net income below expectations.
A day earlier, on Wednesday, the monetary and financial advisor to the IMF, José Viñals he explained that the authorities of the euro zone must fully address the problem of non-performing loans and the burden of corporate debt of banks in the region.
“an essential step remains the establishment of a common guarantee system deposits. And equally important is an approach to large-scale stability of the financial system in the Union, because we do not know who is really in charge, “said Viñals during a talk at the People’s Bank of China.
in turn, called to complete the banking union in order to “move financial stability to firmer ground.”
Caen more bank stocks
the European markets operations closed yesterday at its lowest level since September 2013, dragged down by losses in the banking sector 6.26 percent. In fact, banks segment accumulate a decrease of 10% so far this week.
This of concerns about profitability in an environment of low growth and low interest rates.
according to Reuters, European banks lost more than 350,000 million euros on the stock.
Societe Generale shares fell as much as 15% on the Paris stock Exchange, following the trend of last week’s Deutsche Bank and Credit Suisse, which reached more than 10% fall in the stock market following the publication of its first annual loss since 2008.
According to an analysis by the Wall Street Journal the drop in oil prices seems to be hitting the shares of European banks. According to them, sovereign funds and other investors associated with governments in the Middle East, Africa and Norway are among the biggest losers with the collapse of oil prices, which is forcing some of them to sell assets to raise cash.
to illustrate, explain in the journal specialized than 10% of the shares were held by UniCredit funds Abu Dhabi, Libya and Norway, while about 10% of Barclays PLC and Credit Suisse is owned funds and investors from Norway and Qatar.
as explained by the financial adviser to the IMF, the stock of NPLs of banks representing more than 5.5% of bank assets, this is about 900 million.
“the high delinquency rates undermine the bank’s ability to provide even now that quantitative easing has helped them repair their balance sheets by reducing financing costs”, said Viñals.
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