These 2 European Banks Allegedly have AAA Residential Mortgage Loans
Fitch Ratings has affirmed Credit Suisse’s (NYSE:CS) and UBS AG’s (NYSE:UBS) covered bond tranches at ‘AAA’. Both of these tranches are backed exclusively by residential mortgage loans. The news accompanies a bad day for Europe as Moody’s (NYSE:MCO) downgraded French banks Société Générale andCrédit Agricole, citing their exposure to Greek debt.
Hot Feature: 7 Reasons the European Union has Economic Uncertainty.
UBS shares trade at $12.28, down about 1.6% from yesterday. This represents a P/E ratio of about 7 which is lower than its industry. The company also trades at a sales multiple of 1.4 which is slightly lower than its industry rivals. On the technical front shares trade below their declining 50 day and 200 day moving averages. The MACD shows a bearish crossover while RSI is pointing down at 38.
Relatedly, Treasury Secretary Timothy Geithner tried to instill some confidence in Europe’s ability to solve the debt crisis, saying that they have both the financial and economic capacity to do so. Speaking on CNBC television today, Geithner said, “There is no chance that the major countries of Europe will let their institutions be at risk in the eyes of the market. There is not a chance.”
The banks have already started slashing. Over 70,000 planned staff cuts have been announced at European banks (NYSE:KBE) this year by top firms including UBS (NYSE:UBS), Deutsche Bank (NYSE:DB), Barclays (NYSE:BCS), Royal Bank of Scotland (NYSE:RBS) and Lloyd’s (NYSE:LYG).