European Banks Face Capital Gap With Focus on Leverage - Bloomberg

European Banks Face Capital Gap With Focus on Leverage - Bloomberg

Deutsche Bank, whose asset base for calculating the leverage ratio would shrink by about 3 percent under the more stringent conditions, would still have “the highest mountain to climb,” according to Abouhossein. It would need to raise 12.3 billion euros in capital or cut assets by about 20 percent, or 409 billion euros, to reach the 3 percent goal in 2015, he said.

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In April, Deutsche Bank reported it had 395.5 billion euros of such assets, an amount that represents 19 percent of the company’s reported assets. Some secured loans to other banks are included in this amount, Bloomberg News reported July 11.
UBS AG (UBSN), Switzerland’s biggest bank, said in its first-quarter filing that the amount of offsetting, or netting, totaled 355.7 billion Swiss francs ($380.4 billion), about 29 percent of the Zurich-based lender’s reported assets.
Credit Suisse Group AG (CSGN) would have to raise 1.14 billion francs to meet Basel’s new leverage requirements in 2015, while Paris-based Societe Generale faces a 1.59 billion-euro gap, according to Abouhossein. Barclays, based in London, would have to boost capital by about 7 billion pounds ($10.8 billion) to meet the U.K.’s version of the 3 percent rule, the JPMorgan analyst wrote.
Marc Dosch, a spokesman for Credit Suisse in Zurich, declined to comment on the estimates as did Helene Agabriel at Societe Generale and Giles Croot at Barclays.