Bloomberg News

European Banks Drop as S&P Says It May Cut Euro Nations’ Ratings

December 06, 2011

Dec. 6 (Bloomberg) -- European banking shares dropped, led by Belgium’s KBC Groep NV and France’s Credit Agricole SA, after Standard & Poor’s said it may lower the credit ratings of 15 nations that use the euro.

KBC, Belgium’s biggest lender and insurer, fell as much as 8.9 percent and was down 6.2 percent to 10.60 euros at 11:16 a.m. in Brussels trading. Credit Agricole, France’s third- largest bank, slid as much as 6.2 percent and traded down 3 percent at 4.91 euros in Paris. The 46-company Bloomberg Banks and Financial Services Index declined 0.9 percent.

“Higher cost of borrowing is the real concern,” said Julian Chillingworth, who helps manage 15 billion pounds ($23 billion) at Rathbone Brothers Plc in London. “This creates further strain on banks’ balance sheets.”

S&P put Germany, France and 13 other euro-area nations under watch for a downgrade yesterday, saying “continuing disagreements among European policy makers on how to tackle” the region’s debt crisis risk damaging their financial stability. The move comes as European Union leaders plan to meet Dec. 8-9 in Brussels to end a crisis that led to bailouts in Greece, Ireland and Portugal and now threatens to engulf Italy.

Societe Generale SA, France’s second-largest bank, fell as much as 5 percent and was down 2.1 percent at 19.73 euros.

--Editors: Stephen Taylor, Keith Campbell

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus