EU banks 'selling best assets to raise capital'

13 December 2011

European banks are resorting to desperate measures to raise the required capital to comply with incoming regulations, it has been suggested.

In order to fulfil these rules - which have been designed specifically to avoid any repeat of the present debt crisis in the future - it is thought the continent's financiers need a further €115 billion ($153 billion) before next June.

And, according to a report by Bloomberg, many lenders are now prioritising raising this cash ahead of future prospects and growth by selling some of their most valuable assets to rivals from outside Europe.

For instance, Deutsche Bank is considering getting rid of the majority of its asset management arm, while Santander has already sold its Colombian operations to Corpbanca for a sum of $1.16 billion.

Azad Zangana of Schroders commented: "These are the most profitable parts of their business ... they're being forced by regulators to sell them off."

By Gary Cooper

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