Why Zombie Banks Hate to Write Off Bad Loans: Jonathan Weil
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Jan. 12 (Bloomberg) -- There’s a simple explanation for whythe world’s zombie banks remain so reluctant to write offworthless assets and tap the equity markets for fresh capital.They don’t want to end up like UniCredit SpA.
This month has been a nightmare for the Italian bank’sshareholders. Since embarking last week on a 7.5 billion euro($9.7 billion) stock sale at a steep discount to its Jan. 3closing price, UniCredit shares have fallen 39 percent to 2.56euros. It seems no good deed goes unpunished when it comes tolenders besieged by Europe’s debt crisis. A little bit of candorabout the true state of a company’s finances can hurt a lot.