European banks last year pledged to cut more than $ 1.2 trillion in assets, about 3 percent of the total, to help them cope with the debt crisis. Bank executives said they would sell the division and borrowing and lending controls to reduce the need for short-term funding and capital raising. Instead, the bank has grown fat. Loans in euro area assets increased by 7 percent to € 34.4 trillion ($ 45 trillion) in the year ended July 31, according to data compiled by the European Central Bank. BNP Paribas (BNP) and UniCredit (UCG), the largest bank in France and Italy, to expand their balance sheets at 12 months at the end of June. It may ECB President Mario Draghi thank you. His decision nine months ago to provide more than € 1 billion three-year loan at a regional bank relieve pressure to sell assets at depressed prices. The infusion, which is designed to encourage banks to lend, managed to prevent the short-term credit crisis by reducing their dependence on the market for funding. Also it will make European lenders rely on additional support from the central bank. "Deleveraging does not occur, particularly in Spain and Italy," said Simon Maughan, an analyst at the bank Olivetree Securities in London. "The fact that we got here, or too slow, suggesting that when the time comes we will need another injection of ECB for the first roll." Analysts expect the European lender asks regulators shrinking demand higher capital, and investors become less confident that government can or want to save their biggest banks, a greater return for the loan to the company. The International Monetary Fund forecast in April that the bank reports shrinking as $ 3.8 trillion and restrict lending. IMF estimates could reduce the cuts as euro-area gross domestic product by 1.4 percent.Thanks ECB program, loans to households and companies in the euro area remained stable this year. Total loans rose to € 18600000000000 dated July 31 from € 18.5 trillion at the end of 2011, according to data from the ECB. The central bank said its monthly report released on 13 September that "support effect" long-term refinancing operations, or the Office of the Great WP DJP, The "against sudden and disorderly deleveraging, which could have serious consequences for the economy." Some lenders use ECB loans to buy government bonds. Because they get more than they pay the bond loan, the bank can earn about € 12 billion in revenue per year, according to estimates by Nikolaos Panigirtzoglou, an analyst at JPMorgan Chase (JPM) in London. For lenders in southern European countries, the strategy could backfire. Price of bonds sold by the government of Spain and Portugal fell to a record low this year due to concerns on the part of the investor countries will need bailouts.Banks trying to sell non-performing loans, to bring a higher price, or some of their best efforts, to avoid losses too big. Societe Generale (GLE) sold in the U.S. asset-management unit, TCW Group, last month the private equity firm Carlyle Group (CG) for less than $ 880 million in the bank paid for it in 2001, according to people familiar with the transaction. The lender is based in Paris close to the € 800 million sale of mortgage real estate insurance unit Axa with a discount of less than 10 percent of face value, a person with knowledge of the deal last month. "We have started the disposal program, and we will take the next few quarters," said Societe Generale Chief Executive Officer Frederic Oudéa September 12 interview. Other banks to move more cautiously. This delay can lead to what Alberto Gallo, a London-based analyst at Royal Bank of Scotland (RBS), called "Japanification" of the banking system, the old, while the lender is slow to clean up their balance sheets. "We've gone from the risk of accelerated deleveraging across," he said. "This is a better situation for the economy, although it must be translated into complacency." Bottom line: Having promised to shrink their balance sheet by $ 1.2 trillion, European banks assets increased $ 45 trillion in the year to July.
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