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29. Februar 2016 14:35
Nach der Immobilien Blase kommt jetzt die Fossile Blase
via Bloomberg: Wir sehen erst die Spitze des Eisbergs und der Abstieg bzw Ausstieg aus dem fossilen manischen human zentristischen Zeitalter wird steil werden. Es wird eher einer (Seneca-) Klippe ähneln.
The European earnings season isn't over yet -- but already banks have given some disclosure about the size of their loans to the oil and gas industry: almost $200 billion.
Tip of the icebergEuropean banks' exposures to oil and gasSource: company reportsFigures are not standardized. Exposures vary according to net/gross; HSBC's excludes Brazil
That's more than the U.S. banks' estimated $123 billion of outstanding loans and lending commitments to the industry, and a sign of how Europe's lenders face risks far beyond their home turf as oil lingers near a historic low.
The problem is that this may be the tip of the iceberg.
Disclosure so far has been inconsistent -- some firms provide net exposures and others gross. Others, like Deutsche Bank, haven't given any precise numbers at all.
The direct exposures only capture part of the picture though. Firms like HSBC and Standard Chartered, face a double helping of pain as the falling price of commodities rips through the economies of energy-exporting countries where they have ramped up lending in recent years.
Crude's SlumpWTI has dropped to close to $32 a barrelSource: Bloomberg data
There's also the risk that attention shifts away from oil and gas producers to other industries tied to commodities. Signs of stress are already appearing among traders and miners: Noble Group on Thursday posted its first annual loss in almost two decades, while Anglo American's credit rating was cut to junk earlier this month.
While commodities trading exposure is usually included in banks' overall portfolio, the companies often class it as immune to oil-price fluctuations. That suggests losses in this space would come as a nasty surprise. As for metals and mining, that exposure is worthy of its own iceberg: HSBC alone booked about $100 million in provisions on its $18 billion metals and mining loan book in 2015.
The U.S. banks, which are closer to the threat of their domestic shale boom turning into a bust, are leading the way in terms of transparency (a point made recently by my Gadfly colleagueLisa Abramowicz).
And they're being more realistic. JPMorgan CEO Jamie Dimon warned this week that if oil prices held at around $25 per barrel over 18 months then the bank's loan-loss reserves would go up by $1.5 billion.
European banks are assuming oil will stay at about $30 a barrel, a forecast that appears too benign when compared with predictions of $20 oil from Goldman Sachs and Morgan Stanley.
European optimists counter that falling commodity prices should be a zero-sum game. Energy exposures at most banks are around the three to five percent mark relative to overall group lending, which looks manageable. If cheaper commodities lead to lower costs for consumers and non-energy companies, they say, that should more than offset the pain. Look at ING, a Dutch lender with a big consumer operation: while oil-and-gas loan losses rose in the fourth quarter, overall group loan losses fell.
But economists don't seem to be showing much faith in the growth outlook. The OECD and the European Commission have trimmed their 2016 growth forecasts for the euro zone. A slowdown in emerging markets is not thus far being interpreted as a boon for the West.
Berenberg analysts liken the end of the commodities boom to the popping of the telecom bubble 16 years ago, when an investment spree supported by debt was quickly followed by a collapse in demand. That seems fair.
Loan-loss provisions will have to rise, and European bank CEOs should accept that even if they can't avoid the iceberg, getting a handle on its size is a priority -- and even more transparency is required.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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