Unicredit - and others

Shares in Unicredit - the largest Italian bank by assets - were suspended forty-five minutes after trading began at 8am this morning, during which time they fell by ten per cent.The trigger was the news this morning that Unicredit's emergency €7.5bn cash call was going to be priced at an even deeper discount than feared. The bank, which needs the funds (second only in quantity to those required by Santander) to shore up its capital reserves, is selling shares at a 43% discount to their market value, which had already fallen by fifty per cent over the past year.

Yet, least we should be feeling too comfortable here in the UK, look at this table courtesy of Morgan Stanley:

It seems we'd all be doing quite well by international comparisons if it weren't for the green column, courtesy of our much vaunted and nation-saving financial sector. For fuller and more balanced commentary refer to the article in Business Insider.

And consider also:

Bank share prices show a clear pattern of two waves of ‘collapse’ among large retail, or retail/investment, banks.

The 1st wave saw falls of 90% plus in the shares of banks such as Citigroup, Lloyd’s and RBS. No significant recovery in their share prices has taken place since – which is why they may, in terms of share prices, be characterised as ‘collapsed’ banks.

A number of other large banks – of which Barclays, Bank of America and Société Générale may be taken as examples – initially suffered very severe share price falls during the international financial crisis but then saw a significant recovery. Their share prices are, however, now again falling towards the level of the 1st group of banks. It, of course, remains to be seen whether this trend will continue, but a current tendency of a 2nd wave of banks being drawn into crises which essentially destroys share prices is clear.