European bank fundraising falls to new low in July

The amount of funds raised by European banks in capital markets dropped for the second consecutive month in July, data compiled by S&P Global Market Intelligence shows.

Lenders issued just €1.83 billion in debt and €140 million in equity, for a total of €1.97 billion. This was down from €5.49 billion in June and €10.06 billion in May, and the lowest quarterly issuance since at least January 2021.

Markets have been hit by rising interest rates, inflation stress and recession risk, which contributed to reduced bond issuance for every sector relative to the first quarter, according to a July 28 report from S&P Global Ratings.

July's activity extends a longer trend into the third quarter. In the second quarter as a whole, capital raises totaled €7.87 billion, down from €32.61 billion in the first quarter this year, and from €54.61 billion in the second quarter last year. Before that, issuance had already fallen sharply at the offset of the pandemic in 2020.

Many companies issued record amounts in the previous two years to ride out the COVID-19 pandemic, meaning many are able to hold back this year, Ratings said. It expects bond issuance by global financial services companies to drop about 10% year over year in 2022.

Volatility in debt and equity markets has been fueled by fears that central bank monetary policy will not be sufficient to stave off inflation, recession risk and energy supply shocks, the rating agency said in a separate Aug. 8 report.

Société Générale SA was the sole equity issuer last month, raising €141.7 million in Singaporean dollars. Fellow French bank BPCE SA issued the largest amount of debt — €437.1 million in Japanese yen. OTP Bank Nyrt., Intesa Sanpaolo SpA and Hellenic Bank PCL issued between €100.0 million and €700.0 million.

Equity and capital raising data is collected on a best-efforts basis.

* Access capital markets deal activity on the CapIQPro platform. * Access capital offerings details for Société Générale.