Fitch says top 29 banks need $556bn in equity
RATINGS agency Fitch yesterday said the world’s top banks may need to raise a total of $556bn (£351bn) to meet tougher new capital rules, cutting returns by a fifth and forcing them to curb investor payouts and raise customer charges.
The credit rating agency studied 29 banks named by G20 world leaders as being globally systemically important financial institutions and required to hold core capital buffers of up to 9.5 per cent by the start of 2019.
The list includes Barclays, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan and UBS.
Fitch said the banks represented $47 trillion in assets and may need to raise $566bn of common equity to hit core ratios of around 10 per cent and satisfy new global Basel III requirements being phased in over several years from January.
“Banks will likely pursue a mix of strategies to address these shortfalls, including retention of future earnings, equity issuance, and reducing risk-weighted assets,” Fitch said.