UniCredit approximately lost 2/3 of its market value, Royal Bank of Scotland lost 56%, Credit Suisse, Deutsche Bank and Barclays fell almost twice.
J.P.Morgan Chase and Industrial and Commercial Bank of China Limited are in better situation. They lost only 10 percent.
Stock prices of 20 banks dropped throughout a year. Only, UK Standard Chartered bank has remained unchanged.
Abovementioned figures show uncertainty of the investors. FactSet says UniCredit’s current value is equal to 21% of balance value. Deutsche Bank’s capitalization is equal to 26% of figure in 2008.
Only Wells Fargo’s value is above its balance value. These two indicators of J.P. Morgan Chase coincide.
Impairment of the banks was caused by impact of Chinese economy on market, expectations on change of interest rates by US Federal Reserve System and oil price decline. Brexit results also deteriorated the situation. The shares of the largest banks of the UK fell about 30% as results of Brexit were announced on June 24. Barclays and Lloyd’s Bank lost 30% of their value, Royal Bank of Scotland 35%.
UniCredit is a shareholder of Turkish YapiKredi bank. Earlier, the western media reported that UKiCredit will sell its stocks in Turkish bank. However, the report was denied. Head of Central & Eastern Europe Division at UniCredit Carlo Vivaldi said Turkish market is important for the Group.
Koç Holding and Uni Credito Ä°taliano SPA signed a protocol of intention on 50%-50% cooperation on Koç Financial Services in 2001. As a result of this, shares of Koç Holding in financial sector (Koçbank, Koç Lease, Koç Factoring, Koç Invest, Koçbank Netherlands N.V., Koçbank Azerbaijan and Koç Assets Managemenmt) have been distributed between on Koç Financial Services and Uni Credito Ä°taliano SPA.
In September 2005, Turkey-based Yapi Kredi Bankasi A.S. has also been included in Koç Financial Services. Koçbank Azerbaijan has been renamed to Yapi Kredi Bank Azerbaijan CJSC since 2007.
Deutsche Bank Advisors manages over $100 mln of assets of the State Oil Fund of Azerbaijan. According to outcomes of 2015 December, 7.1% of investment portfolio is managed by foreign investors.
As of December 31, 2015, AZN 3,708,059 ($2,377,875) of the Fund was managed by financial organizations in accordance with the asset management agreements. Fund’s foreign managers were Deutsche Bank AG, EBRD, State Street Global Advisors and UBS.
IMF officials say the largest bank of Germany is one of biggest risks for global financial system. In 2013, it was known that Deutsche Bank’s derivatives made €55.6 trillion or $72.8 trillion which is a record. At that time, many experts surprised that why the US bank has not hit record. US JPMorgan bank ranked at 2nd at that time.
By the way, result of stress-tests conducted by the US Fed in Deutsche Bank is satisfactory for the second time. The bank’s shares fell to its record after the stress-tests.
German largest banks and insurance companies operate interdependently. Allianz, Munich Re, Hannover Re, Deutsche Bank, Commerzbank and Aareal operate more interdependently. As you understand, any poor ring of this chain will lead to collapse of others as “domino effect”.
For interest to note that HSBC and Credit Suisse banks of Deutsche Bank create risks for global financial system.
IMF says commotions in German banking sector have risks for foreign markets rather than domestic. In other word, if Deutsche Bank collapses, this will lead to domino effect.
IMF officials say Germany is to absolutely find the way out. Bank’s assets must be reassessed. Moreover, the government should stiffen the control over the bank and impose moratorium if it is needed. According to German press, the government has already started to take certain steps in this direction. However, IMF means some days while this will take much time. In any case, the government says the situation is under control.
Ilkin Ahmadov, APA Analytical Centre
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