Filed under: Earnings reports, Bad news, Citigroup Inc. (C), Bank of America (BAC), Economic data, Housing
Royal Bank of Scotland (NYSE: RBS) made an anticipated announcement that it would raise $12 billion because of losses. According to Reuters, the money is “to cover a potential 5.9 billion pound writedown on the value of toxic assets and help rebuild a stretched balance sheet.”
The fact that one of Europe’s largest money center banks has to raise so much capital is probably not a good sign for massive U.S. banks like Citigroup (NYSE:.C) and Bank of America (NYSE:.BAC). The asset mix at RBS is likely not terribly different from most other huge financial institutions.
There have been concerns that if the housing market continues to fall and credit problems move to consumer debt and automobile loans that the writeoffs at banks could spike up again. Those who hoped that the worst was behind U.S. banks might well be wrong.
Douglas A. McIntyre is an editor at 247wallst.com.
Entries (RSS)