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Citigroup (NYSE:C), the third largest domestic bank, has recently reported exposure of $31.7 billion to troubled European nations including Greece, Ireland, Portugal, Italy (NYSE:EWI), and Spain (NYSE:EWP). The number is more alarming due to the fact that it is more than double the bank’s most recent estimates of its exposure to European assets, which it estimated to be $13.5 billion on July 15th. Of those at-risk assets, $1.6 billion are in sovereign bonds, $6.4 billion are from credit to financial institutions, and $3.9 billion from corporations.
At its latest earnings conference call, the bank’s management dodged the issue of what kind of losses it could take in a euro zone crisis. “Citi currently believes that the risk of loss associated with these exposures is materially lower than the exposure levels,” the bank said. “Citigroup continues to actively monitor its exposures to these, as well as other, countries.”
JP Morgan (NYSE:JPM) is another American lender with heavy exposure to european credit risks. The second largest US bank disclosed a net exposure of close to $14 billion to the threatened EU nations. $8.7 billion of that net is exposed to european corporate clients, 26% percent, or $3.6 billion, is tied to sovereign debts, mostly in Spain, and the remaining portion is exposed to banks overseas.
Bank of America (NYSE:BAC), the biggest US bank, said yesterday it had a $16.7 billion exposure to the five countries at the end of June, including loans and leases. Included in the total is $15.2 billion of “non-sovereign” exposure. The Charlotte, NC based bank has purchased credit-default protection of $1.77 billion as a hedge against potential losses, according to its most recent filing.
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