European Baking Shares Fall as Sector Worries Ripple
March 24 2023 - 5:52AM
Dow Jones News
By Pierre Bertrand
European banking shares fell Friday as unease originating from
UBS Group AG, Credit Suisse Group AG and Deutsche Bank AG dragged
down the sector's stocks.
At 0912 GMT, UBS and Credit Suisse shares in Switzerland fell by
more than 5%.
The two Swiss banks are among institutions scrutinized as part
of a U.S. Justice Department investigation into whether bankers
helped Russian oligarchs evade sanctions, Bloomberg reported,
citing unnamed sources.
Meanwhile, Deutsche Bank shares fell more than 8% amid reports
of a rise in the price of its so-called credit default swaps, which
track the cost of insuring against bond defaults.
Deutsche Bank said Friday it has decided to redeem $1.5 billion
notes due 2028 early. The notes will be redeemed on May 24 at their
full principal amount together with accrued interest to the
redemption date, the German lender said.
The unease dragged Commerzbank AG shares, which fell more than
4%, while Societe Generale SA fell more than 4%. Italy's UniCredit
SpA and Spain's Banco Bilbao Vizcaya Argentaria SA both fell more
than 3%.
The Stoxx Europe 600 Banks Index fell 3%.
Analysts at Jefferies also cut their recommendation on UBS to
hold from buy, citing risks and uncertainties arising from its
agreed takeover of Credit Suisse. "Negatively, it changes for years
the equity story of UBS, which was based on a lower risk profile,
organic growth focus, high capital return," the Jefferies analysts
said.
Write to Pierre Bertrand at pierre.bertrand@wsj.com
(END) Dow Jones Newswires
March 24, 2023 05:37 ET (09:37 GMT)
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