European Bank Shares Rise on Basel III Agreement
December 08 2017 - 7:34AM
Dow Jones News
By Alberto Delclaux
European bank stocks rose Friday morning led by French gains of
over 3% after an agreement--seen as less onerous than expected--was
reached on Basel III reform.
Global finance officials agreed Thursday on banking rules on how
to measure riskiness of lenders, a longtime topic of discussion
between Europe and U.S. officials. The compromise will likely force
banks, especially in Europe, to increase their capital cushion. Yet
they will have a comfortably long period of time to do so, as the
new rules will be phased in between 2022 and 2027.
Analysts at Credit Suisse say the proposal could act as a
catalyst for the sector, highlighting the long phase-in period,
which gives banks time to build capital. The analysts signal as
relative winners mortgage-heavy banks with manageable impact or
sizeable buffers--such as Lloyds Banking Group PLC (LLOY.LN),
Danske Bank A/S (DANSKE.KO) and ABN AMRO Group NV (ABN.AE)--and
banks with historically high litigation--such as Lloyds and BNP
Paribas SA (BNP.FR).
Other brokers, such as Natixis, have pointed out that the
agreement has significantly reduced the risk of a more conservative
dividend policy on the part of banks.
French banks are leading gains in the sector, with Societe
Generale SA (GLE.FR) up 4.4%, BNP Paribas up 3.7% and Credit
Agricole SA (ACA.FR) up 3.9%.
Write to Alberto Delclaux at alberto.delclaux@dowjones.com
(END) Dow Jones Newswires
December 08, 2017 07:19 ET (12:19 GMT)
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