Bloomberg News

European Banks Need to Raise 22 Billion Euros, Exane Says

October 27, 2011

Oct. 27 (Bloomberg) -- Raiffeisen Bank International AG, UniCredit Spa and Bankia SA are among European banks that may need to raise 22 billion euros ($30.8 billion) to meet regulatory requirements, wrote analysts at Exane BNP Paribas.

Unicredit may need 5 billion euros of equity capital, Raiffeisen 2 billion euros and Bankia 1 billion euros, Exane analysts led by Jag Yogarajah wrote in a report to clients today. Lenders including Unione di Banche Italiane SCPA, Banco Santander SA, and Banco Bilbao Vizcaya Argentaria SA can partly meet their needs through convertible bonds, Exane said.

“A reduction of dividends and restrictions on bonuses, potential disposals and contingent capital” are among ways of raising funds, Exane wrote. Banks may need to raise about 10 billion euros, excluding convertibles, the note said. Exane based the estimate on banks under its research coverage.

Europe’s banks will need to raise 106 billion euros in fresh capital under tougher rules agreed by European leaders in response to the crisis. Banks will need to have core Tier 1 capital equal to at least 9 percent of assets after writedowns on sovereign debt, the European Banking Authority said yesterday.

Raiffeisen and Erste Group Bank AG won’t need state aid from the Austrian government to meet the tougher capital requirements, the country’s banking regulator said today.

Societe Generale, France’s second-largest bank, has said it will meet the additional capital rules from its own resources, and won’t need state said. Natixis SA won’t need a capital increase as its majority shareholder Groupe BPCE will meet new EBA reserve requirements, said a BPCE executive earlier today.

Stress Test

Deutsche Bank AG said this week it can raise its capital level to more than 9 percent by June without measures beyond those already announced while Commerzbank AG said it doesn’t plan to ask the German state for funds to help boost its capital ratio after the stress test conducted by European bank regulators.

Greek banks will need to raise 30 billion euros of additional capital, Spanish banks 26.2 billion euros, Italian lenders 14.8 billion euros, French firms 8.8 billion euros and German banks 5.2 billion euros, the EBA said. The lenders have until Dec. 25 to submit their plans for raising the money to national supervisors.

--Editors: Jon Menon, Steve Bailey

To contact the reporter on this story: Ambereen Choudhury in London at

To contact the editor responsible for this story: Edward Evans at

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