Lehman's Spreading Stain

From London to Tokyo, global financial institutions are starting to disclose their exposure to potential losses following the Lehman Brothers collapse

by Jack Ewing and Carol Matlack

How bad is the collateral damage from the bankruptcy of Lehman Brothers (LEH), and what effect will it have on institutions outside the U.S.? Standard & Poor's credit analyst Nick Hill calls losses by European banks and institutions that did business with Lehman "moderate and manageable." But the rating agency, like BusinessWeek a unit of The McGraw-Hill Cos. (MHP), says banks could take a further hit as Lehman winds down its holdings, causing asset prices to fall.

The full scale of the losses won't be known for several months. Some banks have already begun to disclose their exposure, generally in the hundreds of millions of dollars rather than billions. Others, including Germany's two largest banks, Deutsche Bank (DB) and Dresdner Bank, have not yet said whether they will take a hit.

Here is a sampling of some of the losses that banks and insurers outside the U.S. have said they expect to suffer as a result of the Lehman bankruptcy. In some cases they may be able to recover some of their money, making the final amount lower:

Aegon (AEGN.AS) (Dutch insurer)
$373 million
Fixed income, including credit default swaps

Aozora Bank (8304.T) (Japan)
$463 million
Loans

Aviva (AV.L) (British insurer)
$480 million
Debt, money market

AXA (AXA) (French insurer)
$423 million
Credit including credit default swaps. Not including losses from a 0.5% stake in Lehman

BNP Paribas (BNPP.PA) (French bank)
$567 million
Derivative claims, bank loan, letters of credit

Dexia (DEXI.BR) (French-Belgian retail bank)
$705 million
Long-term bonds

Industrial and Commercial Bank of China (601398.SS) (state-owned commercial lender)
$151.8 million
(No details provided)

Intesa Sanpaolo (ISP.MI) (Italian bank)
$370 million
Bonds, loans, guarantees

Lloyds TSB (LYG) (British bank)
$75.4 million
Letter of credit

Mizuho Bank (8404.T) (Japan)
$289 million
Loans

RZB (Austrian banking group)
$355 million
Lehman debt, mainly bonds

Shinsei Bank (8303.T) (Japan)
$363 million
Loans

Société Générale (SOGN.PA) (French bank)
$675 million
Derivatives and other market activities, debt

Ewing is BusinessWeek's European regional editor. Matlack is BusinessWeek's Paris bureau chief.