Europe Banks’ Trillion-Euro Bad-Loan Burden Spurs Cash Calls
- Distressed debt remains top priority eight years after crisis
- Big banks gearing up for second round of ECB stress tests
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Eight years after the financial crisis, a flurry of stock sales is reminding investors just how far some European banks still have to go to repair their balance sheets.
Spain’s Banco Popular Espanol SA jolted markets last week with plans for a 2.5 billion-euro ($2.8 billion) rights issue a month after its chief executive officer said capital was adequate. In Italy, Banco Popolare SC and Veneto Banca SpA are tapping investors for 1 billion euros each after Banca Popolare di Vicenza SpA turned to a rescue fund for its cash call. All these consumer banks are raising money to cover a backlog of bad loans, a plight shared in varying degrees by many of their peers.