Bank shares were sucked into a whirlpool of selling yesterday as concern about the industry's emerging market exposure climbed to new highs.
French banks led the rout with the early run of halfyear results from the sector failing to reassure investors.
Societe Generale fell 11.8 per cent in turnover of 1.4 billion French francs. The bank, which spelt out first-half emerging market provisions late on Wednesday, but disappointed analysts by not detailing the amount of overall lending exposure, gave up Ffr113 at Ffr841.
BNP fell Ffr32.20 to Ffr337.80, Paribas tumbled Ffr34.50 to Ffr420, and CCF lost Ffr26.10 at Ffr385.90.
German banks remained under pressure with Hypo-Vereinsbank tumbling 7.15 deutschmarks to DM118.70. Deutsche Bank lost DM6.25 to DM102.10, Dresdner Bank fell DM2.05 to DM70.45 and Commerzbank was DM1.68 lower at DM50.22.
Swiss banks resumed their slide after Wednesday's news that Credit Suisse's investment banking arm, Credit Suisse First Boston (CSFB), had $3.9 billion (£2.64 billion) of exposure to Russia and Brazil. Credit Suisse, down almost 10 per cent on Wednesday, lost another 14 Swiss francs to Sfr198, as banking analysts took contrasting views on the stock. Morgan Stanley upgraded its investment rating and said its share price target was Sfr245.
Lehman Brothers, however, cut its rating, saying that the downgrade reflected CSFB's $250 million losses by the end of August because of its exposure to Russia. Lehman added that uncovered exposures remained substantial and further charges seemed likely. Rival UBS was down Sfr40 at Sfr436.
Italian banks were hard hit with BCI down 958 lire to L9,213, Banca di Roma L264 lower at L2,662 and San Paulo off L2,175 at L20,136. Sentiment was equally depressed in Spain where Latin American devaluation scares were again rife.
