Monday, October 24, 2011

European Banks Face Recapitalizations

Wall Street Journal
October 24, 2011

UniCredit SpA, Deutsche Bank AG and BNP Paribas SA are among the most likely of Europe's large banks to have to tap investors for more capital, analysts said Monday, as investors braced themselves for final details about a planned, coordinated recapitalization of the region's banks.

Analysts said, though, that these and other potentially undercapitalized banks are likely to try other methods first to strengthen their capital bases, not least because banks' share prices are low and demand from investors is likely to be minimal.

UniCredit declined to comment on analysts' forecasts, and executives said a business plan that could include capital-management measures could be announced by the end of the year. Deutsche Bank declined to comment on the forecasts; it has said repeatedly that it doesn't need to raise capital. BNP Paribas, too, has said it doesn't need to raise capital.

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