Barclays had 8.8 billion euros of Spanish government debt, according to its statement, the most among the U.K. banks.
RBS, Lloyds, Barclays Fall After Stress Tests Expose Weaknesses
By Howard Mustoe - Jul 18, 2011 8:11 AM ET .
Royal Bank of Scotland Group Plc (RBS), Barclays Plc (BARC) and Lloyds Banking Group Plc (LLOY) tumbled in London trading after stress tests exposed the potential for losses from their sovereign and real-estate investments.
Barclays fell as much as 3.9 percent and was down 3.4 percent at 215.8 pence at 12:41 p.m. RBS slid as much as 4.7 percent and was down 1.6 pence at 33.5 pence. Lloyds dropped as much as 3.6 percent to 43.1 pence.
“They didn’t come out particularly strong,” said Shailesh Raikundlia, an analyst at MF Global Ltd. in London. “Lloyds, and RBS in particular because of their Ireland exposure, as well as the commercial real estate, where the writedowns were pretty severe on an adverse scenario.”
European banks may have to raise as much as 80 billion euros ($112 billion) of additional capital as stress tests conducted by the European Banking Authority failed to allay investor concern about a Greek default and governments’ ability to bail-out their lenders, wrote analyst Kian Abouhossein, at JPMorgan Cazenove after the results were published on July 15.
RBS holds 389 million pounds of Irish sovereign debt, it said in its stress test results. RBS took a 1.82 billion-pound ($2.93 billion) provision for its non-defaulted commercial real- estate loans under the EBA’s adverse scenario for 2011, compared with an actual provision of 482 million pounds for 2010. Lloyds recorded provisions for non-defaulted commercial real estate loans of 338 million euros for 2011 in the tests, compared with 297 million euros for 2010.
Barclays had 8.8 billion euros of Spanish government debt, according to its statement, the most among the U.K. banks.
