Europe’s biggest banks are stepping up efforts to boost capital and trim assets as pressure from regulators and investors increases, half a decade after the global financial crisis began.
France’s BNP Paribas and Germany’s Commerzbank for the first time published figures on equity as a share of total assets, after regulators focused attention on the measure.
While the Federal Reserve forced the biggest U.S. banks to clean up their balance sheets eight months after the September 2008 collapse of Lehman Brothers, European regulators tolerated lower capital levels to keep loans flowing during the sovereign-debt crisis. For Emmanuel Hauptmann, who helps oversee more than $3bn at Reyl Asset Management SA, steps to bolster reserves and cut leverage are overdue.
'We look at leverage quite a bit,' said Hauptmann, a senior equity fund manager at the Geneva-based firm. 'The very high leverage that the European banks still have makes them relatively unappealing' compared with U.S. lenders, he said.
U.S. commercial bank assets shrank by 10% in 2009 and 2010, while euro-area assets have fallen only 5% from peak levels, according to an Ernst & Young report in July.
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