Vladimír Urbánek (Kurzy.cz)
Markets  |  September 18, 2012 11:26:54

European Bank postponed the sale of assets, assets grew by 7% to EUR 34.4 trillion thanks to LTRO from the ECB


European banks still planned last year to reduce its assets over the next year by about $ 1.2 trillion euro in an attempt to avert the impending crisis, short-term liquidity.
According to ECB statistics but in reality contrary to European banks in July of this year, its assets have risen over the last 12 months by 7% to 34.4 billion. Asset growth during this period was recorded by banks, which had one of the biggest problems, such as BNP Paribas French or Spanish bank Santander and Italian UniCredit.
The main reason for a different development from the original assumptions were mainly injection of liquidity from the ECB in the form of a EUR 1 billion borrowed under the LTRO market for three years on very favorable terms.This injection avert acute short-term liquidity risk of a crash and caused a significant decrease in pressure on the forced sale of bank assets, which also took place under adverse conditions for the seller. Thanks to the program also grew LTRO lending volume, even if only slightly. By July of this year, banks have provided for the last 12 months loans of 18.6 trillion EUR in the previous year was 18.5 billion. The volume of loans in Spain decreased by 5% to 1.6 trillion euros, also experienced a decline in Greece.

According to ECB European banks instead of asset sales raiser core capital gains and retain recapitalize its debt to another state. Some banks used funds from the ECB to buy government bonds, which have significantly improved their balance sheets mainly because compared to government bonds may hold no reserves, because such bonds are consideredrisk-free. According to analysts, the following JPMorgan European banks have improved their position by about 500 mld.EUR. Thanks to the higher interest rates of government bonds of some countries, the banks could through LTRO improve overall profits by up to 12 mld.EUR.

Greater asset sales last year rose only British and Irish banks were pushed to sales under the terms of previously granted aid. Scottish RBS, which in 2008 won the support of 45.5 mld.GBP, last year reduced assets by 1.4 trillion GBP. Lloyds, which received assistance in the crisis year of 20.3 mld.GBP, reduced assets by about 66 mld.GBP.

Analysts estimate that the main wave having to sell assets is yet to come in connection with the need to meet the new "Basel" rules on capital adequacy, which should come into full effect until 2019.To achieve this you will need an estimated increase banks' core capital of about 400 mld.EUR. The main part probably obtains the subscriptions of new shares, but still left for sale assets are inconsiderable part of this volume.
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Evropské banky odkládají prodeje aktiv, majetek rostl o 7% na 34,4 biliónu EUR díky LTRO od ECB

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