Financial News: Worst-Performing Europe Bank Stock Of 2011
Last update: 1/3/2012 10:15:49 AM
By Richard Partington
Of FINANCIAL NEWS
Commerzbank (CBK.XE), which was last month told by the European Banking Authority to find EUR5.3 billion of extra capital by the end of June, was the worst performing large-cap banking stock in Europe last year, according to analysis by Financial News.
In what was a disastrous year to be investing in large European banks, the German bank underperformed all others after its share price crashed by 76.54% during the year from €5.55 at the close of trading Dec. 31, 2010, to EUR1.3 at the end of Dec. 30, the last trading day of 2011.
Last year proved to be a tumultuous time for banks as U.S. and European regulators sought to impose a variety of rules and strictures, while the prolonged euro-zone debt crisis caused a great deal of uncertainty.
As a result, banking stocks fell more than any other sector in 2011, according to the data provider. The Stoxx Europe 600 Banks index - which measures the share price of 49 European banks - fell 34% last year, while in the same period the Stoxx Europe 600 index fell by 12.78%.
In 2010, the Stoxx Europe 600 Banks index was down 11.28%, while the Stoxx Europe 600 index fell by 8.95%.
Even Standard Chartered (STAN.LN), the best performing large European bank by stock performance, suffered a near 20% drop in its share price last year. The U.K. bank, which has a strong Asia and emerging markets focus, fell by 18.34% between December 31, 2010 and the close of markets on Dec. 30, 2011. Shares of HSBC (HBC), which also has a significant presence in Asia, fell by 24.58% over 2011.
Commerzbank's poor share performance comes after increased speculation it will require a second bailout from the German state. Local German newspapers reported that the government was making plans for a possible bailout of the bank after the EBA said it needed to increase its capital by EUR5.3 billion by June 30. The bank has until Jan. 20 to present adequate plans to the EBA on how it intends to increase its capital.
Lloyds Banking Group (LYG), which is partly owned by the U.K. government, was Europe's second worst performing large cap banking stock. Its share price fell from 65.7 pence by 60.57% to 25.91 pence at the close of Dec. 30.
Shares of Royal Bank of Scotland (RBS), also part-owned by the U.K. government, fell by 48.35% in 2011. Barclays (BCS) fell by 32.72% last year.
Commerzbank was unavailable for comment at time of going to press. Lloyds and Standard Chartered declined to comment.
Web site: www.efinancialnews.com
(END) Dow Jones Newswires
January 03, 2012 10:15 ET (15:15 GMT)
