In These New Times

A new paradigm for a post-imperial world

British banks tight-lipped on exposure to PIGS debt

Posted by seumasach on November 24, 2010


30th April, 2010

In stark contrast to Banco Santander, Britain’s leading banks refused to detail their exposures to the debts of the troubled economies of Greece, Portugal and Spain, although they were falling over one another to play them down.

The Bank of International Settlements has estimated the collective exposures of Britain’s banks to Greece at $15bn (£10bn) Portugal at $24.2bn and Spain at an alarming $114bn, threating a fresh banking crisis if contagion from the Greek crisis spills over into other debt-ridden Eurozone economies.

Barclays and HSBC declined any comment, although privately they have been playing down their exposures as “limited” and “manageable”. Lloyds Banking Group – which is 41 per cent owned by the tax payer – yesterday said it had “no material exposure to Greece or Portugal” while claiming its exposure to Spain is “limited”.

Royal Bank of Scotland, 84 per cent owned by the state, was the most open of the UK’s “big four” putting its exposure to Greece at “less than £1bn”, with a further £1.4bn of Portuguese debt sitting on its books.

However, the bank would not comment on its exposure to Spain saying only that it believes this to be “manageable”.

In further worrying news for banks, Standard & Poor’s yesterday said research suggested that they could face losses of up to €92bn in total on commercial real estate (CRE) loans in the UK, Ireland, and Spain for 2009-2011.

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