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To: Dale Baker who wrote (64297)	9/15/2008 11:52:45 AM
From: Dale Baker	Read Replies (1) \| Respond to of 118717

Still somewhat amazed that the European bank pfds are still getting killed when most are in much better shape than the US victims of collapse: Slim Lehman Pickings For European Banks By MATTHEW CURTIN September 15, 2008 10:50 a.m. With any crisis comes opportunity for those able to survive it. In the case of the calamities on Wall Street, the disappearance of three of the most venerable U.S. investment banks as independent institutions leaves the banking model prevalent in Europe looking relatively healthy. The most successful European banks, such as BNP Paribas, BBVA, Banco Santander and Unicredit, have had a deceptively simple international growth strategy based on retail banking, and focused on garnering deposits and extending consumer credit. The banks have used these growing franchises to underpin limited, lower-risk investment banking activities, and build up asset-management businesses. They haven't had to sell stock to bolster their balance sheets in the credit crunch. In the medium term, these banks are likely to fill some of the gap left by the collapse of Lehman Brothers and a distracted Merrill Lynch as it's absorbed by Bank of America. Merrill and Lehman had 6.1% and 4%, respectively, of capital market and M&A-related investment banking revenue in Europe in the eight months to end-August this year, according to Dealogic. UBS's choice earlier this year of BNP Paribas as an underwriter of its 15 billion Swiss francs capital increase, alongside Goldman Sachs and Morgan Stanley, may be a taste of things to come. But the prudence these European banks have shown to date in avoiding high-risk bets in the credit markets means they're unlikely now to make a big push into investment banking. The credit crisis is far from over. Shareholders and regulators won't be keen for much more than the reallocation of limited amounts of capital to some less risky businesses, like equity- and debt-market underwriting. After all, many European banks with more ambitious investment banking aspirations -- such as Barclays, Royal Bank of Scotland and Societe Generale -- are only recently recapitalized or, in the case of Deutsche Bank, still highly leveraged. Among the better-capitalized banks, Santander has amply demonstrated its pure retail focus with this year's purchase of U.K. mortgage lender Alliance & Leicester and last week's interest in Deutsche Postbank.