12th August 2008 (New York) - Bloomberg
By Yalman Onaran
Banks' losses from the U.S. subprime crisis and the ensuing credit crunch crossed the $500 billion mark as write-downs spread to more asset types. The write-downs and credit losses at more than 100 of the world's biggest banks and securities firms rose after UBS AG reported second-quarter earnings today, which included $6 billion of charges on subprime-related assets.
The International Monetary Fund in an April report estimated banks' losses at $510 billion, about half its forecast of $1 trillion for all companies. Predictions have crept up since then, with New York University economist Nouriel Roubini predicting losses to reach $2 trillion.
`It just keeps spreading from one asset to another, so it's hard to know when these write-downs will stop,'' said Makeem Asif, an analyst at KBC Financial Products in London. ``The U.S. Economy needs to stabilize first. But even then, Europe could lag and recover later. There's still a lot more downside.''
Auction-rate securities have begun adding to the losses as regulators and prosecutors force banks to buy back bonds they'd sold as safe investments. UBS set aside $900 million to cover potential losses from repurchasing the securities, while Citigroup Inc. and Wachovia Corp. estimated losses at $500 million each.
Subprime Collapse
The collapse of the U.S. subprime mortgage market last year has saddled banks worldwide with $501 billion of losses from declining values of securities tied to all types of home loans and commercial mortgages as well as leveraged-loan commitments.
Banks and brokers have raised $353 billion of capital to cope with the write-downs, according to data compiled by Bloomberg. The gap between losses and capital infusions, which now stands at $148 billion, has regularly narrowed to about $80 billion as capital raising follows write-down announcements.
The following table shows the asset write-downs and credit losses as well as the capital raised in response. All numbers are in billions of U.S. dollars, converted at today's exchange rate if reported in another currency.
| Firm | Write-downs & Loss (US$ Bn) | Capital Raised (US $ Bn) |
| Citigroup | 55.1 | 49.1 |
| Merrill Lynch | 51.8 | 29.9 |
| UBS | 44.2 | 28.3 |
| HSBC | 27.4 | 3.9 |
| Wachovia | 22.5 | 11 |
| Bank of America | 21.2 | 20.7 |
| IKB Deutsche | 15. | 12.6 |
| Royal Bank of Scotland | 14.9 | 24.3 |
| Washington Mutual | 14.8 | 12.1 |
| Morgan Stanley | 14.4 | 5.6 |
| JPMorgan Chase | 14.3 | 7.9 |
| Deutsche Bank | 10.8 | 3.2 |
| Credit Suisse | 10.5 | 2.7 |
| Wells Fargo | 10 | 4.1 |
| Barclays | 9.1 | 18.6 |
| Lehman Brothers | 8.2 | 13.9 |
| Credit Agricole | 8 | 8.8 |
| Fortis | 7.4 | 7.2 |
| HBOS | 7.1 | 7.6 |
| Societe Generale | 6.8 | 9.8 |
| Bayerische Landesbank | 6.4 | - |
| Canadian Imperial (CIBC) | 6.3 | 2.8 |
| Mizuho Financial Group | 5.9 | - |
| National City | 5.4 | 8.9 |
| Lloyds TSB | 5 | 4.9 |
| IndyMac | 4.9 | - |
| WestLB | 4.7 | 7.5 |
| Dresdner | 4.1 | - |
| BNP Paribas | 4 | - |
| LB Baden-Wuerttemberg | 3.8 | - |
| Goldman Sachs | 3.8 | 0.6 |
| E*Trade | 3.6 | 2.4 |
| Nomura Holdings | 3.3 | 1.1 |
| Natixis | 3.3 | 6.7 |
| Bear Stearns | 3.2 | - |
| HSH Nordbank | 2.8 | 1.9 |
| Landesbank Sachsen | 2.6 | - |
| UniCredit | 2.6 | - |
| Commerzbank | 2.4 | - |
| ABN Amro | 2.3 | - |
| DZ Bank | 2 | - |
| Bank of China | 2 | - |
| Fifth Third | 1.9 | 2.6 |
| Rabobank | 1.7 | - |
| Bank Hapoalim | 1.7 | 2.4 |
| Mitsubishi UFJ | 1.6 | 1.5 |
| Royal Bank of Canada | 1.5 | - |
| Marshall & Ilsley | 1.4 | - |
| Alliance & Leicester | 1.4 | - |
| U.S. Bancorp | 1.3 | - |
| Dexia | 1.2 | - |
| Caisse d'Epargne | 1.2 | - |
| Keycorp | 1.2 | 1.7 |
| Sovereign Bancorp | 1 | 1.9 |
| Hypo Real Estate | 1 | - |
| Gulf International | 1 | 1 |
| Sumitomo Mitsui | 0.9 | 4.9 |
| Sumitomo Trust | 0.7 | 1 |
| DBS Group | 0.2 | 1.1 |
| Other European banks* | 7.2 | 2.3 |
| Other Asian banks* | 4.6 | 7.8 |
| Other U.S. banks* | 2.9 | 1.9 |
| Other Canadian banks* | 1.8 | - |
| TOTAL** | 501.1 | 352.9 |
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