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Another Day, Another Question

13 July 2016 by lberuti

Financials have attracted a lot of attention recently. The UK banks have been in the spotlight since polls started to indicate a closer Brexit race than initially anticipated. Italian banks have been talked about on the back of their non-performing loan exposure, particularly after MONTE ( Banca Monte dei Paschi ) was asked by the ECB to cut such holdings by €14Bln by 2018. Today brought more question marks after DNB’s earning miss. It took investors’ focus back on European banks on- and off-balance sheet exposures to the energy sector. DNB higher provisions may indicate that other banks will also need to increase theirs on non-investment grade energy exposures and the charge the company took on Shipping & Offshore highlighted how legacy shipping exposure remains a key source of risk to certain banks. RBS, STANLN (Standard Chartered), INTNED (ING), CMZB (Commerzbank) and DANBNK (Danske Bank) all saw their 5-year CDS caught a bid.