European banks' capital offerings up year on year in Q3

European banks' capital offerings rose by just over €6 billion year on year in the third quarter, reflecting the increased certainty around the interest rate environment compared with a year ago, S&P Global Market Intelligence data shows.

Banks brought €56.53 billion of capital offerings to market in the three months to Sept. 30, 2023, of which just €36.4 million was equity. Capital offerings amounted to €49.20 billion, all in the form of debt, a year earlier.

Eurozone banks are expected to increase debt issuance in the coming years as more of their bonds mature and they seek to mitigate a decline in central bank funding, the European Banking Authority (EBA) said in a July report.

Lenders will also issue more debt to meet the minimum requirement for their own funds and eligible liabilities (MREL) threshold. Market-based funding transactions by banks are expected to rise by 5.5% in 2023, the EBA said.

As of Sept. 30, banks have launched capital offerings totaling €299.23 billion, about 24% above the €242.09 billion raised during all of 2022, Market Intelligence data shows.

Top issuers

UK banks were the biggest offerors in the third quarter, led by HSBC Holdings PLC, which issued €2.09 billion of senior debt in August. London-based Barclays PLC accounted for another two of the 10 biggest transactions by size during the quarter, raising a total of €2.75 billion in two transactions in September.

Lloyds Banking Group PLC also occupied two places in the top 10 with issuances of €1.36 billion and €1.25 billion, as did Italy-based Intesa Sanpaolo SpA with transactions of €1.50 billion and €1.25 billion.

Norway-based Pareto Bank ASA and Sunndal Sparebank carried out the only two equity offerings in the quarter, raising €30.35 million and €6.08 million, respectively.