Millennium bcp exposed to crisis in Eastern Europe

BCP group is among a number of European banks that has been adversely affected by the economic crisis sweeping Eastern Europe.

According to the investment bank JP Morgan, the bank could need part of a 32 billion euro recapitalisation package because of its exposure in those markets.

JP Morgan said last week that European banks operating in countries such as Poland, Hungary, Czech Republic, Greece, Romania, Bulgaria, Slovenia, the Baltic states and Turkey could need between 32 and 40 billion euros in total to shore up their balance sheets and make up for toxic assets, including Millennium bcp which could need an additional 1.65 billion euros for both its international and national operations.

Loan defaults and falls in capital ratios are just some of the risks outlined by JP Morgan that has divided countries into five risk zones, five being the worst risk for defaults and one being the least risk.

Millennium bcp is exposed to three out of five countries in Risk Zone 2 because of its operations in Poland, Greece and Turkey.

In Risk Area 3, a zone at greater risk of default, the Portuguese bank has liabilities in Romania, one of four countries on that list.

On Thursday (March 5) BCP shares fell 0.5 per cent to 59.5 cents a share following the JP Morgan results.

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