Bad debts are peaking and pay is falling at Europe’s banks
TWO years ago banks began to include tables in their results announcements that were designed to reassure investors that their exposure to toxic securities was under control. The crisis has moved on. Now one European financial firm’s presentation includes a slide that pleads “limited exposure to sovereign debt [of] Portugal, Ireland, Greece and Spain”.
Yet whatever Europe’s macroeconomic woes, a more optimistic picture is emerging from its lenders. Setting aside disappointing results from Societe Generale of France, which was hit by more write-downs on American assets, the evidence from fourth-quarter results is that the pace at which loans are souring has peaked. ...