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Text size [+][-]  Tuesday March 16 2010GLOBAL EDITION

Considered view
28 Oct 2009 16:30

MisreadING

Context News

European bank share prices have fallen sharply since news of ING's restructuring emerged on Monday.

Royal Bank of Scotland and Lloyds Banking Group and ING have all fallen 10%. Allied Irish Banks and Bank of Ireland have fallen 22% and 26% respectively.

Banks that did not receive state aid in the form of capital have fared better. Barclays has fallen 7% since Monday, while HSBC has only fallen 1.6%.

RBS and Lloyds have fallen 31% and 27% since hitting peaks at the end of August. AIB and BoI have fallen 45% and 48% respectively since peaking in late September.

Barclays and HSBC have fallen 16% and 8% since peaking in mid-September.

Tumbling bank share prices following ING’s EU-encouraged break-up may seem overblown. The Dutch bancassurer wanted to split itself up anyway. But bailed-out bank shares were frothy, while bank subordinated debt was trading at a discount to par. A correction was overdue.

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