The Complete (And Very Disturbing) European Bank Loan-To-Deposit Ratios: A Redux

Tyler Durden's picture

Unfortunately, when we posted this chart showing European bank loan-to-deposit ratios we were about 10 months ahead of the "deposit impairment to grow into non-bad loan assets" curve. Now that Cyprus over the past week, and DieselBOOM in the past hour, has reminded everyone just how critical it is to not be a soon to be impaired uninsured depositor in any European bank encumbered with a massive loan burden, where one "resolution" may (and will) be depositor impairment, it is time to bring this back up front and quite personal. Because when the next insolvent European bank is revealed to be, gasp, insolvent, it just may have saved your money in retrospect.

Because remember what Dijsselbloem just said: "countries with large banking sectors must look to restructure, reduce overall size" in other words a forced, and definitely not beautiful deleveraging. And since he wasn't kidding, the full impact of "renormalization" would mean about the $5 trillion in additional deleveraging that was put on the backburner when Basel III ratios were made into a total mockery.

And this is what we said 10 months ago: it is as applicable now as it was then:

The chart [above] explains why not only is Europe's several asset constrained, it is also running out of funding, in the form of depositor cash: the most critical bank liability. Remember: without incremental deposits, banks can not invest in new assets, unless they generate cash from operations, and thus grow shareholder equity. There is a problem: as the final chart below shows, Europe, and especially Scandinavia which has consistently remained off the radar, is literally off the charts when it comes to LTD ratios.


With banks such as Danske, SHB, Swebank, DnB, and Nordea literally at 200% Loan-to-Deposits, but most other European banks too, even the tiniest outflow in deposit cash (ala what is happening in the PIIGS) will send the system into yet another liquidity spasm.

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jmcadg's picture

Still interested to see where Barclays fit in this chart.

hedgeless_horseman's picture



Because when the next insolvent European bank is revealed to be, gasp, insolvent, it just may have saved your money in retrospect.

Respectfully, Mr. Durden, my money isn't in any of these banks.

LawsofPhysics's picture

Notice how Bank of New York and JPM have "repositioned" themselves nicely.  I seem to remember them stacking up differently not so long ago.  The tylers can correct me if I am wrong.  Always nice to be close to the "free money" spicket I guess.

cifo's picture

I am tired of waiting for those fireworks.

redpill's picture

You think all those central/north Euro banks will have to "save themselves" like Dieselboom says?  Fuck no, they'd force the taxpayers to suck it up.

The BankersFirst policy. 


What would make this chart more interesting is if the bar width was proportional to the total capital size of the bank in question, that way it would call out the big boys and how they compare to each other.

BaBaBouy's picture

SHEEET ... How Many MORE Reasons Do I Need To Buy More GOLD ???


Stop Tyler, Stop I Say...

FL_Conservative's picture

This picture will look dramatically worse in the next 6 months after most Europeans find a way.....any move their "uninsured" money out of the system.  Like I said in an earlier post, "insurance" will become a fluid term that will be re-defined once there are not enough "uninsured" deposits to make ends meet. 

LawsofPhysics's picture

The only way for anyone to do what you suggest, is to hold real assets and insure them yourself.  The only reason this continues is because no one has yet asked to really define/see/inspect/discuss the underlying collateral behind any of this bullshit.  It amazes me that the sheep still allow the banksters to print money out of thin air and give it to their buddies so that they can buy real assets.  Money is nothing but a means to power and control now, has little to do with medians of exchange.  Things will only get worse until the supply lines crack and all those EBT cards (in europe and the U.S.) stop working.  Then the worlds goes to war, same as it ever was.

FL_Conservative's picture

That's precisely what I'm referring to.   Maintain 1-3 small balance bank accounts in different regions to provide some liquidity (only an amount one is willing to risk) and the rest goes into REAL assets.  The wise will no longer believe that anything else is "safe". 

spentCartridge's picture


But, what happens when the world goes all war like on your arse, wrecks and steals all REAL assets ...


Bullion stashes in a hole 'till the dust doth settle = win, no?


olto's picture

Yeah, and where are the 'off-balance sheet' goodies and baddies?

I don't see them anywhere------------

kito's picture

your computer screen doesnt have enough height to accurately demonstrate the Derivatives to Deposit ratios in chart form..................................................

Ropingdown's picture

I think, hedgeless, that that is what he meant, but for those less foresightful than you.

jmcadg's picture


'I drew up the chart, so I don't have to show where I am'.

redpill's picture

I noticed that too, wtf?

e-recep's picture

house of rothschild (owner of barclays) is a unique beast.

3x2's picture

ECB to quite FED.


Had to laugh way back when Barclays were claiming (In the UK) solvency and in reality they took 850 Billion in water wings from The FED.


LauraB's picture

How does the $53 Trillion in derivatives that BofA put its depositors on the hook for a while back fit into this chart? Bank Of America Forces Depositors To Backstop It's $53 Trillion Derivative Book To Prevent A Few Clients From Departing The Bank:;

monkeyboy's picture

Any idea where the big 4 Australian banks(Commwealth, Westpac, ANZ, NAB) sit on the chart?

3x2's picture

Right on top of massive Gold, Coal, Gas, Meat  .... reserves

ParkAveFlasher's picture

The Belgian Mafia will take back all its spare Euros like a wet vac applied to a soppy carpet.  All will "render unto Caesar" but they won't know it until they hit the ATM. 

Watch out, Euro bears!! 

SDRII's picture

IF only they would print...


Europe’s policy makers “missed a big opportunity” to do a deal with the Federal Reserve that would have enabled them to stop the currency from strengthening as the U.S. central bank bought debt to boost the economy, Mundell said in a Bloomberg Television interview with Sara Eisen. The euro’s advance was a “devastating thing to happen” for the region’s weaker economies and Europe should consider its own form of asset purchases, which tend to weaken the exchange rate, he said.

March 25 (Bloomberg) -- Robert Mundell, a Nobel prize-winning economist and professor of economics at Columbia University, talks about the euro's appreciation and the European Central Bank's "missed" opportunity to help stem the debt crisis. He spoke yesterday in New York with Bloomberg Television's Sara Eisen. (Source: Bloomberg)

“When the dollar was already high and the euro was low, at $1.20, it was a good time to step in,” Mundell said. The “next time it happens, that the euro gets down low, they should keep it there and not let it get above that. That’ll do wonders to help revive the European economies.”

Schmuck Raker's picture

I didn't get past "Nobel prize-winning economist".

machineh's picture

Kurgman = major Nobel devaluation

faboutlaws's picture

Is that because he does economics like Obama does peace?

spentCartridge's picture


It is because there is no Nobel peace prize for economics. It is a bogus accreditation, not a real Nobel.

Ropingdown's picture

It isn't as if Mundell's view wasn't discussed at the time.  The 'help' to weak economies would have been a problem for Germany and Nederlands.  The problem isn't a failure to hold the Euro down. It is a failure to select a sensible group of nations to form a currency union.  The rest is BS.  The dream of bringing the peripherals up to north core standards was a fantasy based on the desire to see a pleasing image on future maps, Europe.  Politician fantasy.  Poor-country citizen fantasy.  Just fantasy.

Bastiat's picture

Mark up the value of assets on the balance sheet: problem solved!

Winston Churchill's picture

From fantasy to full retard fantasy ?

NotApplicable's picture

More likely, they'll outlaw balance sheets, as those things always inhibit our god named Growth.

Unbalanced sheets, that's where the future lies.

comrade rally monkey's picture

Pillow top mattress flying off shiwroom floors

mayhem_korner's picture

even the tiniest outflow in deposit cash...will send the system into yet another liquidity spasm.


Gives new meaning to the word 'leverage'.

Creepy Lurker's picture

Yep, and if anyone thinks that isn't the case in the US as well...

Iocosus's picture

The whole purpose of the EU was to destroy the sovereignty of the many diverse nations in Europe through monetary policy.

I say the plan is going well, while others surely will take the opposite stance. Keep in mind that destructive policies seem like lunacy to the outside observer, but to the engineers, their end is not the soundness of the financial markets, but one world governance.

Bastiat's picture

Yes the plan was rehearsed for years in the 3rd world; see Confessions of an Economic Hitman.  Incredible that the 1st world nations were dumb enough to fall into the same trap.  Literally incredible . . .

MachoMan's picture

Not really...  Our collective mind is fucking retarded...  always has been, always will be...  fancy folks in fancy clothes and new fangled electronic gadgets aren't immune.

Bastiat's picture

"literally incredible"  i.e.  not believable. In the 3rd world countries,  if making leaders rich while engineering debt enslavement for their countrymen didn't work, they sent in the jackals.  A deal they couldn't refuse.

toys for tits's picture

I would swear that the Troika is trying to destroy all the countries in the Eurozone through the monetary system.

mayhem_korner's picture



I think TPTB's first instinct is self-preservation.  That they destroy everything and everyone around them to try to maintain power is sort of a "side effect."

swanpoint's picture

ZH, how about by county? Luxembourg banks are 21x the size of its economy.

Urban Redneck's picture

by country of deposit origin might be more insightful 

swanpoint's picture

banks assest versus gdp w/ chart depicting country of origin.. starting with luxembourg and malta

Bank assets vs gdp:

Urban Redneck's picture

So Italy has more ounces of gold in its terroritorial possession and a lower relative size of its banking industry than Germany, and yet its the Italians who are a threat to zee German/EU stabiltyyyyyyyyyy??????????????

q99x2's picture

Looks like Texas Capital is about to run out of capital.

NotApplicable's picture

Wonders which "friend of George" got all of those loans?

cherry picker's picture

TBTF is now dead and the margin calls and bank failures which marked the deepest hour of the dirty thirties is upon everyone.

They made a mistake in the USA by trying to float a bad system a few years ago.  Too much government and controlling capitalism never works, there has to be a balance and Bernanke, Paulsen, George W as well as Obama will see what they unleashed.

This is the only way things can be fixed.  Trim government, let the insolvent banks and companies fail and rebuild anew.  Derivatives should be classified as gambling and banks not allowed to partake in it.


ATrillionSavedIsATrillionEarned's picture

Is it too late to start MAAB?

Mothers Against Adolescent Bankers.

Lobby for immediate license suspensions, hefty fines, roadside checkstops, jail sentences.

It should be cinch to get charitable ststus from the IRS!

bnbdnb's picture

Oil > Land > Gold > Fiat