Traders Are Betting That These 14 Banks Will Default

UniCredit Bank Crisis

Photo: AP Images

As Italian and Spanish sovereign borrowing costs shoot higher, corporate credit default swaps (CDS) have remained remarkably high.CDS is essentially insurance on a security that pays in the event of a default.

Business Insider analysed CDS prices on more than 100 publicly traded banks across the U.S., Europe, Middle East, Asia-Pacific, and Latin America. 

What we found: for at least 14 banks, the cost to insure debt remains above 500 basis points. 

It should be noted that some CDS markets are very illiquid and the quotes can be quite volatile.

What follows is a look at the cost to insure $10,000 of five-year CDS per year. Values are presented in basis points, as firms issue debt in differing currencies.

(Ex: If a CDS on a U.S. corporate issued in dollars is trading at 500 bps, it would currently cost $500 to insure $10,000 for one year). 

#14: Bayerische Hypovereinsbank, Cost To Insure $10,000 Sovereign Debt: 507.5 bps

Year-to-Date Change:

-8.6 per cent

5-Year CDS Price (1/1/2012):

551.12 bps

Description:

Hypovereinsbank was acquired by UniCredit in 2005 for €19.2 billion, or $22.8 billion. The bank serves as UniCredit's German arm, employing some 20,000 people through 780 branches. The company's debt still trades separately from UniCredit.

Source: Bloomberg CDS Intraday London

#13: Intesa Sanpaolo SpA, Cost To Insure $10,000 Sovereign Debt: 509.32 bps

Year-to-Date Change:

+5.7 per cent

5-Year CDS Price (1/1/2012):

482.03 bps

Description:

Banca Intesa is the result of the mergers of Banco Ambrosiano Veneto, Cariplo and Banca Commerciale Italiana, forming the largest bank in Italy and one of the largest in Europe. Intesa employs 99,504 employees across four main areas: retail, investment, and private banking, as well as asset management.

Source: Bloomberg CDS Intraday London

#12: UniCredit SpA, Cost To Insure $10,000 Sovereign Debt: 552.9 bps

Year-to-Date Change:

+3.3 per cent

5-Year CDS Price (1/1/2012):

534.99 bps

Description:

UniCredit is one of the largest Italian banks, with operations in 22 euro-area countries. Top and bottom line results have been challenged at the firm, with revenue declining in 2010 and 2011. The company's retail division provides the largest revenue power, accounting for half of UniCredit's $25.2 billion in sales.

Source: Bloomberg CDS Intraday London

#11: Banca Monte dei Paschi, Cost To Insure $10,000 Sovereign Debt: 671.50 bps

#10: Banco Popolare, Cost To Insure $10,000 Sovereign Debt: 695 bps

Year-to-Date Change:

-12.7 per cent

5-Year CDS Price (1/1/2012):

795.77 bps

Description:

Banco Popolare is an Italian cooperative bank. It was the first bank in the country to receive state aid during the credit crisis, selling $2.1 billion in convertible notes to the government.

Source: Bloomberg CDS Intraday London

#9: Banco de Sabadell, Cost To Insure $10,000 Sovereign Debt: 740 bps

Year-to-Date Change:

+1.6 per cent

5-Year CDS Price (1/1/2012):

728.66 bps

Description:

Banco Sabadell is one of the largest banks in Spain, with 87 per cent of its revenue derived from commercial banking. Sabadell employs some 10,550 people.Sabadell recently purchased CAM, a savings bank, after it was taken over by the government.

Source: Bloomberg CDS Intraday London

#8: Dexia, Cost To Insure $10,000 Sovereign Debt: 761.80 bps

Year-to-Date Change:

-9.9 per cent

5-Year CDS Price (1/1/2012):

845.36 bps

Description:

Belgian bank Dexia is a major retail banking that has sold off operations across Europe to shore up its balance sheet. In 2008, the bank appealed to Belgium, France, and Luxembourg for a bailout and received some $200 billion in state guarantees. However, losses have persisted, with the bank reporting a second quarter loss of €431 million.

Source: Bloomberg CDS Intraday London

#7: Caixa Geral de Depositos, Cost To Insure $10,000 Sovereign Debt: 845.2 bps

Year-to-Date Change:

-14.3 per cent

5-Year CDS Price (1/1/2012):

986.28 bps

Description:

Caixa is a state-controlled bank and the largest bank in Portugal. Revenues have been in decline for the past four years, at approximately €4.1 billion in 2011 (down from €5.7 billion in 2008).

Source: Bloomberg CDS Intraday London

#6: Bank of Ireland, Cost To Insure $10,000 Sovereign Debt: 849.4 bps

Year-to-Date Change:

-30.6 per cent

5-Year CDS Price (1/1/2012):

1,223.06 bps

Description:

The Bank of Ireland is one of the big four financial institutions in the country, along with Ulster, Allied Irish, and National Irish banks. The firm required a €5.2 billion bailout in 2011 as the Irish banking crisis accelerated.

Source: Bloomberg CDS Intraday London

#5: Anglo Irish Bank, Cost To Insure $10,000 Sovereign Debt: 959.6 bps

Year-to-Date Change:

unavailable

5-Year CDS Price (1/1/2012):

unavailable

Description:

The Anglo Irish Bank was taken over by the Irish government in 2009 and merged with the Irish Nationwide Building Society to form the Irish Bank Resolution Corporation.

Source: Bloomberg CDS Intraday London

#4: Banco Espirito Santo, Cost To Insure $10,000 Sovereign Debt: 968.2 bps

Year-to-Date Change:

-13.7 per cent

5-Year CDS Price (1/1/2012):

1,121.63 bps

Description:

Banco Espirito is the largest-listed Portuguese bank, with revenue powered by retail banking, international commercial banking and capital markets. The company has seen earnings collapse in 2011, recording losses in the third and fourth quarter. Credit Agricole has a large stake in Espirito Santo.

Source: Bloomberg CDS Intraday London

#3: Banco BPI, Cost To Insure $10,000 Sovereign Debt: 1,011 bps

Year-to-Date Change:

-14.3 per cent

5-Year CDS Price (1/1/2012):

1,179.79 bps

Description:

Banco BPI is a major Portuguese bank with more than 1.4 million customers. The company operates more than 600 branches and specialises in home loans. Caixa owns some 39.54 per cent of BPI.

Source: Bloomberg CDS Intraday London

#2: Banco Comercial Portugues, Cost To Insure $10,000 Sovereign Debt: 1,159 bps

Year-to-Date Change:

-29.2 per cent

5-Year CDS Price (1/1/2012):

1,637.64 bps

Description:

Banco Comercial Portugues is a major Portuguese bank, operating the Millennium BCP retail banking network. The company received a €3 billion bail out in 2012 after it came under extreme financial duress. BCP reported a €0.13 loss in 2011.

Source: Bloomberg CDS Intraday London

#1: Kazkommerts, Cost To Insure $10,000 Sovereign Debt: 1,191 bps

Year-to-Date Change:

+36.7 per cent

5-Year CDS Price (1/1/2012):

871.29 bps

Description:

Kazkommerts is a brokerage and retail bank in Almaty, Kazakhstan, employing some 7,307 people. Kazkom is the largest bank in Kazakhstan, with a large business lending to collective farmers. The company reported a first quarter net profit of KZT 6.4 billion, or $42.9 million.

Source: Bloomberg CDS Intraday London

Here's a full breakdown of all global and super regional bank CDS rates

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