Five major euro zone banks face limits on payments of dividends, bonds, and coupons the next year because they have very little capital, he said the European Central Bank, in a worrying sign for a sector with a lean profitability and problems by bad loans.
The ECB did not mention the five entities, part of the nearly 130 banks it oversees from 2014 with the aim of avoiding a repeat of the banking crisis and sovereign debt from 2008 to 2012.
The ability to deliver payments to bondholders and shareholders is crucial for banks, because it affects their ability to raise cash from investors. For example, concerns about payment of stamp sank the shares of Deutsche Bank in the past year.
The ECB’s annual report was revealed at a time in banks of Italy and of other countries affected by the crisis are under pressure to raise capital to cover losses for bad loans. The debt Monte dei Paschi could need of financial assistance after the bad results that you had in your attempt to attract investors.
“The adequacy of capital is still being negatively affected by the loans of poor performance in some countries, which weighs on the profitability of banks,” said the ECB.
The debt toxic legacy of the financial crisis is limiting the capital and by reducing the emissions of new loans in countries such as Italy, Greece and Portugal.
The ECB is trying to achieve that the banks of these countries to throw off those bad loans, but often that involves raising capital to absorb the resulting losses.
For example, the Italian Unicredit started a few days ago, an operation to increase capital in 13,000 million euros (us$ 13.540 million), in part to address the sale of credit toxic.
In the meantime, Monte dei Paschi up to now has not been successful in collecting 5000 million euros agreed with the monetary authority of the euro area and is likely to require the help of the Italian State to the end of this year.
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