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To: maceng2 who wrote (61)	10/7/2002 4:59:26 PM
From: maceng2	Read Replies (1) \| Respond to of 1417

Bad loans fears hit European bank shares news.ft.com By Charles Pretzlik in London Published: October 7 2002 19:49 \| Last Updated: October 7 2002 19:49 Fears about bad loans and possible fund-raisings sparked further sharp declines in European bank stocks, despite attempts by bank executives to bolster investor confidence. Market anxiety was exacerbated by Douglas Flint, HSBC's finance director, who said: "We do worry about systemic risk." Speaking at a conference in London hosted by Merrill Lynch, the investment bank, Mr Flint said HSBC's own capital base and liquidity position remained strong. However, he expressed unease at the large losses on other banks' books "because of its systemic implications". Commerzbank, Germany's third largest quoted bank, fell another 5.9 per cent to €5.70 in late Frankfurt trading, despite denying that it faced a liquidity crisis. The bank's shares, which at one point were down almost 11 per cent, have nearly halved in the past month. Mehmet Dalman, Commerzbank's head of investment banking and a member of the group board, told the Merrill conference that the bank did not plan a rights issue to boost its capital ratios. "The market wants us to hit a panic button but we're not going to do that." Klaus-Peter Mueller, the bank's chairman, said in a staff memo: "There are no grounds for questioning the solidity of our bank." Shares in Credit Suisse, which fell sharply last week, dropped again, losing nearly 5 per cent to close at SFr20.75 having been down by as much as 11 per cent. Fund managers in Zurich said investors were pricing in expectations that Switzerland's second largest bank would be forced to raise fresh capital, despite its denial last week. Phil Ryan, Credit Suisse chief financial officer, said: "We believe that we have the resources to get from where we are to the point when earnings recover, and there are no capital increases planned for the group. Our capital levels are adequate." UBS was also a sharp faller, losing more than 6 per cent to SFr52.05. Other European banks such as ABN Amro and Credit Agricole lost similar amounts. Some banks enjoyed a rebound. Barclays in the UK gained 3 per cent to 400p. Abbey National, which is the subject of interest from potential bidders, rose nearly 6 per cent to 535p.