Factbox-US, European banks could lose over $5 billion from risky buyout loans

NEW YORK (Reuters) – Big U.S. and European banks are facing tougher times in the riskiest segments of the lending market.

Biggest U.S. lenders including Bank of America and Citigroup wrote down $1 billion in the second quarter on leveraged and bridge loans as rising interest rates made it harder for banks to offload debt of investors and other lenders.

Below is a compilation of writedowns that global banks took during the second quarter:

BANK OF AMERICA

Bank of America said it recorded market value losses related to leveraged financial positions in the second quarter.

Chief Financial Officer Alastair Borthwick said the market turmoil and sharp slowdown in the second quarter caused a slowdown in leveraged financial markets, causing a number of trades to drop.

CITIGROUP Citigroup Inc wrote down $126 million in the second quarter.

Chief Financial Officer Mark Mason said leveraged finance was under considerable pressure, but noted that Citigroup was not a big player in the market.

WELLS FARGO

Wells Fargo & Co suffered a $107 million impairment due to widening credit spreads.

CREDIT SUISSE Credit Suisse said it suffered losses of 235 million Swiss francs ($247.45 million) in leveraged finance.

J.P. MORGAN

JPMorgan took a markdown of $257 million on its bridge loan portfolio.

“I think we made conscious choices here to reduce our risk appetite and accepted some equity losses in leveraged finance,” Chief Financial Officer Jeremy Barnum said.

DEUTSCHE

Deutsche Bank also took a hit to its leveraged loan portfolio as deal prospects deteriorated with rising interest rates and extreme market volatility caused by the Russian invasion of Ukraine. .

Deutsche took an impairment of 150 million euros during the quarter.

BARCLAYS

Barclays cut some leveraged finance deals as it managed its deal pipeline, said Anna Cross, the bank’s chief financial officer.

($1 = 0.9497 Swiss francs)

(Reporting by Saeed Azhar; Editing by Richard Chang)

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