20 Banks That Will Get Crushed If The PIIGS Go Bust

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Photo: Jesslee Cuizon, Flickr

UPDATE: Now it looks like Commerzbank could be the next bank to fall in the crisis, which we found to have exposure to the PIIGS second only to Dexia of non-peripheral European banks in this exposure stress test.PREVIOUSLY: EU leaders are dithering over what they should do to stem the escalating eurozone crisis, and banks across Europe are praying that they will get their act together before it’s too late.

Economic conditions in core eurozone states like Germany have begun to take a hit, and signs that credit conditions are tightening for banks are everywhere. Banks with high exposures to the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) would be the first to feel the heat of a sovereign default or euro exit.

We took a list of the largest European banks by assets and compared their market cap, common equity, and total exposure to PIIGS debt (thank you for the bank statistics, EBA!). Then we calculated exposure to PIIGS debt (sovereign and private) as a percentage of the banks’ common equity. (Notice that HSBC, ING, and even Societe Generale are all absent from this list.)

So far our track record is pretty good–we predicted that Dexia was the most vulnerable bank outside of the PIIGS back in July. If the eurozone crisis continues to escalate, we will see more and more banks bow to the pressure of exposure and become unable to borrow money.

The worst 20 cutoff for our test ended up being exposure equal to about 175% of common equity, but it really gets out of control once you get to the PIIGS banks (#1-9). But Dexia’s fall suggests that bank vulnerability is already seeping beyond the periphery into the core (#10-20).

#20 - Royal Bank of Scotland Group (UK)

PIIGS Exposure: $146.42 billion

Market Cap: $60.96 billion

Common Equity: $83.58 billion

Exposure as % of Common Equity: 175%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#19 - Landesbank Berlin (Germany)

PIIGS Exposure: $13.11 billion

Market Cap: $5.60 billion

Common Equity: $7.31 billion

Exposure as % of Common Equity: 179%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#18 - Barclays (UK)

PIIGS Exposure: $123.51 billion

Market Cap: $43.91 billion

Common Equity: $65.510 billion

Exposure as % of Common Equity: 189%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#17 - Landesbank Baden-Württemberg (Germany)

PIIGS Exposure: $32.05 billion

Market Cap: $11.27 billion

Common Equity: $13.94 billion

Exposure as % of Common Debt: 230%

Source: EBA Stress Tests (exposure and common equity) and Google Finance (market cap)

#16 - DZ Bank (Germany)

PIIGS Exposure: $24.69 billion

Common Equity: $10.34 billion

Exposure as % of Common Equity: 239%

Source: EBA Stress Tests (exposure and common equity) and Google Finance (market cap)

#15 - KBC Bank (Belgium)

PIIGS Exposure: $39.70 billion

Market Cap: $9.05 billion

Common Equity: $16.09 billion

Exposure as % of Equity: 247%

Source: EBA Stress Tests (exposure and common equity) and NYSE Euronext (market cap)

#14 - Credit Agricole (France)

PIIGS Exposure: $192.06 billion

Market Cap: $29.97 billion

Common Equity: $65.50 billion

Exposure as % of Common Equity: 293%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#13 - Deutsche Bank (Germany)

PIIGS Exposure: $140.61 billion

Market Cap: $49.73 billion

Common Equity: $43.02 billion

Exposure as % of Common Equity: 327%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#12 - BNP Paribas (France)

PIIGS Exposure: $280.96 billion

Market Cap: $79.91 billion

Common Equity: $78.43 billion

Exposure as % of Common Equity: 358%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#11 - Commerzbank (Germany)

PIIGS Exposure: $67.38 billion

Market Cap: $18.45 billion

Common Equity: $14.60 billion

Exposure as % of Common Equity: 462%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#10 - Dexia (Belgium)

PIIGS Exposure: $132.95 billion

Market Cap: $5.229 billion

Common Equity: $10.34 billion

Exposure as % of Common Equity: 552%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)


#9 - Banco Santander (Spain)

PIIGS Exposure: $567.20 billion

Market Cap: $92.08 billion

Common Equity: $59.51 billion

Exposure as % of Common Equity: 953%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#8 - Unicredit (Italy)

PIIGS Exposure: $541.54 billion

Market Cap: $34.41 billion

Common Equity: $50.59 billion

Exposure as % of Common Equity: 1,070%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#7 - Bank of Ireland (Ireland)

PIIGS Exposure: $102.43 billion

Market Cap: $1.39 billion

Common Equity: $7.40 billion

Exposure as % of Common Equity: 1,385%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#6 - BBVA (Spain)

PIIGS Exposure: $552.90 billion

Market Cap: $52.80 billion

Common Equity: $35.39 billion

Exposure as % of Common Equity: 1,566%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#5 - EFG Eurobank Ergasias (Greece)

PIIGS Exposure: $76.01 billion

Market Cap: $2.07 billion

Common Equity: $4.74 billion

Exposure as % of Common Equity: 1,601%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#4 - Intesa Sanpaolo Group (Italy)

PIIGS Exposure: $607.03 billion

Market Cap: $51.06 billion

Common Equity: $37.07 billion

Exposure as % of Common Equity: 1,638%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#3 - Banco Popular Español (Spain)

PIIGS Exposure: $182.94 billion

Market Cap: $6.91 billion

Common Equity: $9.49 billion

Exposure as % of Common Equity: 1,927%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#2 - Banca MPS (Italy)

PIIGS Exposure: $290.98 billion

Market Cap: $7.96 billion

Common Equity: $6.24 billion

Exposure as % of Common Equity: 4,666%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

#1 - Allied Irish Banks (Ireland)

PIIGS Exposure: $129.02 billion

Market Cap: $2.00 billion

Common Equity: $0.387 billion

Exposure as % of Common Equity: 33,352%

Source: EBA Stress Tests (exposure and common equity) and Bloomberg (market cap)

But European banking problems aren't the only thing you should be worried about right now.

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