Bankrupt Banker: Barclays and Deutsche Bank among the lenders that Spain’s central bank said were in need of of extra capital

Barclays and Deutsche Bank among the lenders that Spain’s central bank said were in need of of extra capital

Among the lenders that Spain’s central bank said were in need of of extra capital were two international names: Barclays and Deutsche Bank. The British bank Barclays was told to put in an additional 552 million euros in order to meet a core capital requirement of 8 percent, Bank of Spain said Thursday. Germany’s Deutsche Bank, whose business in Spain is largely private banking, was told to top up with 182 million euros. Both lenders told the Bank of Spain that they would would take the necessary steps. Those numbers are dwarfed by the capital that Spain’s savings banks have been told to raise by September, with several cajas — Bankia, Civica and Mare Nostrum — planning initial public offerings to cover the gap. Others are seeking large investors to take private stakes. Altogether, financial institutions in Spain including Barclays and other private-sector banks will need to raise 15.2 billion euros to meet the central bank’s requirements, if they are to avoid the injection of public funds, considered partial nationalization. The Spanish subsidiaries of Barclays and Deutsche can simply turn to their parent corporations for the money. A spokesman for Barclays said Friday that the fund-raising was part of the bank’s capital planning, and that it would not need to raise additional money. The domestic savings banks seek more than 14 billion euros, of which Caja Madrid and its affiliates alone must raise 5.8 billion euros. But Barclays led in its category after reporting in its full-year 2010 results last month that loan impairments in the country had experienced “a significant increase,” a symptom of the country’s wider troubles. Corporate loan impairments in Spain more than tripled to 898 million pounds in 2010 from 268 million pounds in 2009, contributing to an overall loss in Barclays corporate loan unit. The bank said at the time that the widening losses were “driven by depressed market conditions in the property and construction sector, including some significant single name cases” in the country. The Financial Times reported this week that Barclays planned to close more than 100 of its 600 branches in Spain. Moody’s lowered Spain’s credit rating on Thursday to Aa2, with a negative outlook, saying the costs of cleaning of the financial sector would surpass current government estimates. The move by the ratings agency may make it more expensive for the banks to raise money at the very moment that they are rushing to look for it. The lenders must notify the central bank of their fund-raising plans by April 1, if they have not already. In the summer, Europe will announce the results of its stress tests, which may lead Spanish regulators to revise their estimates of how much capital should be raised. The banks are expected to have completed their fund-raising by September, although extensions until March of next year are possible.

Barclays and Deutsche Bank among the lenders that Spain’s central bank said were in need of of extra capital

Among the lenders that Spain’s central bank said were in need of of extra capital were two international names: Barclays and Deutsche Bank. ...