Five years after giving Royal Bank of Scotland Group Plc a record banking bailout, the British government is making it harder to recoup its money by sowing confusion over the firm’s structure and future profitability.
Lloyds Banking Group Plc’s $15 billion of contingent convertible bonds are underperforming subordinated debt because regulatory changes threaten to prompt repayment of the notes, triggering losses for investors.
Deutsche Bank AG’s announcement yesterday that earnings will suffer this quarter added to a cacophony of negative news over the past two weeks that’s increasing pressure on the company’s new leadership.
A European Union plan to impose losses on bondholders during bank rescues means borrowing costs for weaker banks will rise unless they bolster their finances, said analysts and fund managers including Simon Adamson at CreditSights Ltd.
SNS Reaal NV’s subordinated bonds rallied, stemming a decline of as much as 29 percent since Jan. 10, amid speculation the Dutch bank and insurer will be able to sell a stake and avoid taking a bailout.