Europe Banks May Face $27 Billion Energy-Loan Losses, BofA Says
- Sum amounts to 6% of three years worth of pretax profit
- Analysts say stock prices are discounting even worse losses
This article is for subscribers only.
European banks face potential loan losses from energy firms of $27 billion, or about 6 percent of their pretax profit over three years, according to analysts at Bank of America Corp.
“We believe European banks with large exposures to energy and commodities lending will be increasingly challenged over these positions by shareholders,” analysts Alastair Ryan and Michael Helsby wrote in a note to clients on Tuesday. “While long-term oil- and metal-price forecasts are well above current levels, we expect the equity market to continue to stress exposures to current market prices and deduct potential losses from the earnings multiple of the banks.”