Bloomberg News

Austria Says Europe Banks Need 100 Billion Euros of Capital

October 20, 2011

(Adds information on EU summit in third paragraph.)

Oct. 20 (Bloomberg) -- Austrian Finance Minister Maria Fekter said the European Banking Authority is estimating European banks will need about 100 billion euros ($137 billion) in additional capital, less than some media had reported.

“We let the European financial supervisor estimate the capital needs for the banks to be on a sound footing,” Fekter told retail investors at a convention in Vienna. The result “isn’t as high as some media have reported, it’s about roughly 100 billion euros that would be needed,” she said.

European leaders are meeting on Oct. 23 to agree on a plan to boost the region’s bailout fund and decide how to strengthen bank capital. European recapitalization plans may amount to 70 billion euros to 90 billion euros, short of market expectations, the Financial Times reported earlier today, citing people familiar with the talks.

BNP Paribas SA and Royal Bank of Scotland Group Plc may be among banks that can avoid recapitalization altogether, while lenders may be allowed to offset gains on sovereign debt against losses and thereby reduce the amount of additional capital required, MF Global Ltd. said today.

UniCredit SpA, Italy’s biggest bank, may have to raise 8.8 billion euros and Deutsche Bank AG may need 2.7 billion euros, according to a note by Simon Maughan, head of sales and distribution at MF Global in London.

--With assistance from Boris Groendahl in Vienna and Anne- Sylvaine Chassany in Paris. Editors: Keith Campbell, Stephen Taylor.

To contact the reporter on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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