Credit Suisse & European Banking Sector
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Matthew Unterman
Director of Predictive Analytics, S3 Partners
Credit Suisse’s 2022 losses, wealth management customer outflows, “material weaknesses” in its 2021 and 2022 financial reporting, Saudi National Bank’s inability to increase its investment stake, and recent closings of two U.S. banks sent its stock and the entire European banking sector into a tailspin. The Lyxor STOXX Europe 600 Banks UCITS ETF was -7.08% for the day. Short sellers were the beneficiary of this news and the largest shorts in the European banking sector are:
European Banking Sector
Ticker
SI % Float
Short Interest
BNP PARIBAS
BNP FP
4.67%
$3,109,740,285
UNICREDIT SPA
UCG IM
4.18%
$1,428,122,404
INTESA SANPAOLO SPA
ISP IM
2.71%
$1,083,352,758
BANCO SANTANDER SA
SAN SM
1.51%
$914,154,147
HSBC HOLDINGS PLC
5 HK
0.59%
$797,089,385
SOCIETE GENERALE
GLE FP
3.79%
$783,227,388
ING GROEP NV
INGA NA
1.59%
$757,261,443
BANCO BILBAO VIZCAYA ARGENTA
BBVA SM
1.50%
$649,874,157
ABRDN PLC
ABDN LN
10.71%
$561,440,871
SVENSKA HANDELSBANKEN AB
SHBA SS
3.92%
$557,934,981
EQT AB
EQT SS
4.07%
$469,553,974
SWEDBANK AB
SWEDA SS
2.43%
$452,242,424
SKANDINAVISKA ENSKILDA BANKEN
SEBA SS
2.35%
$413,098,399
NORDEA BANK ABP
NDA SS
1.08%
$411,353,321
CREDIT AGRICOLE
ACA FP
3.18%
$408,512,615
CAIXABANK SA
CABK SM
2.58%
$407,562,905
HSBC PLC ADR
HSBC US
0.06%
$388,367,455
NORDEA BANK ABP
NDA FH
1.01%
$386,167,897
DEUTSCHE BANK AG
DBK GR
1.67%
$364,777,492
CREDIT SUISSE GROUP AG
CSGN SW
4.18%
$361,919,638
CREDIT SUISSE GROUP AG-REG
CSGKF US
0.97%
$82,547,414
CREDIT SUISSE GRP ADR
CS US
0.41%
$41,151,975
Total European Banking Sector
2.85%
$23,792,894,766
Short interest in Credit Suisse group AG is $486 million, 5.56% SI % Float:
Rank
Credit Suisse Short Interest
Ticker
SI % Float
Short Interest
1
CREDIT SUISSE GROUP AG
CSGN SW
4.18%
$361,919,638
54
CREDIT SUISSE GROUP AG-REG
CSGKF US
0.97%
$82,547,414
81
CREDIT SUISSE GRP ADR
CS US
0.41%
$41,151,975
Total Short Interest
5.56%
$485,619,027
We have seen $5.42 billion of net short selling in the European Banking sector over the last thirty days. The Banking stocks with the largest increase in shares shorted were:
Euro Bank Largest Increase Shares Shorted
Ticker
SI % Float
Short Interest
30D Change Shares Shorted
UNICREDIT SPA
UCG IM
4.18%
$1,428,122,404
$1,294,643,755
BNP PARIBAS
BNP FP
4.67%
$3,109,740,285
$929,843,420
INTESA SANPAOLO SPA
ISP IM
2.71%
$1,083,352,758
$584,236,550
ING GROEP NV
INGA NA
1.59%
$757,261,443
$412,944,409
SOCIETE GENERALE
GLE FP
3.79%
$783,227,388
$361,127,448
CREDIT SUISSE GROUP AG
CSGN SW
4.18%
$361,919,638
$251,075,499
PARTNERS GROUP HOLDING AG
PGHN SW
1.83%
$342,311,309
$211,629,521
HSBC HOLDINGS PLC
5 HK
0.59%
$797,089,385
$181,606,233
NATWEST GROUP PLC
NWG LN
0.92%
$170,791,996
$170,211,266
CREDIT AGRICOLE
ACA FP
3.18%
$408,512,615
$155,290,408
DEUTSCHE BANK AG
DBK GR
1.67%
$364,777,492
$149,456,841
SVENSKA HANDELSBANKEN AB
SHBA SS
3.92%
$557,934,981
$122,823,454
LLOYDS BKG GRP PLC
LLOY LN
0.44%
$170,734,984
$114,305,749
NORDEA BANK ABP
NDA SS
1.08%
$411,353,321
$111,137,885
NORDEA BANK ABP
NDA FH
1.01%
$386,167,897
$106,148,372
JULIUS BAER GROUP LTD
BAER SW
1.15%
$147,691,174
$100,755,540
SWEDBANK AB
SWEDA SS
2.43%
$452,242,424
$90,520,451
EQT AB
EQT SS
4.07%
$469,553,974
$86,935,640
BARCLAYS PLC
BARC LN
0.40%
$108,473,066
$84,578,118
ERSTE GROUP BANK AG
EBS AV
1.02%
$111,449,135
$72,804,315
The Banking stocks with the largest increase in short covering were:
Euro Bank Largest Increase Shares Covered
Ticker
SI % Float
Short Interest
30D Change Shares Shorted
HSBC HOLDINGS PLC
HSBA LN
0.16%
$219,329,251
($159,075,664)
UBS GROUP AG-REG
UBSG SW
0.54%
$339,681,827
($157,671,828)
ABRDN PLC
ABDN LN
10.71%
$561,440,871
($114,147,593)
BANCO SANTANDER SA
SAN SM
1.51%
$914,154,147
($73,924,566)
BANK OF IRELAND GROUP PLC
BIRG ID
0.35%
$36,702,486
($69,041,862)
STANDARD CHARTERED PLC
STAN LN
0.77%
$153,360,177
($57,037,395)
BANK OF IRELAND GROUP PLC
BIRG LN
0.79%
$82,545,226
($43,392,202)
ING GROEP NV
INGVF US
0.05%
$24,832,909
($37,192,303)
DEUTSCHE BANK
DB US
0.44%
$95,262,190
($32,430,241)
PKO BANK POLSKI SA
PKO PW
1.32%
$74,675,102
($29,204,171)
CAIXABANK SA
CABK SM
2.58%
$407,562,905
($28,339,632)
AIB GROUP PLC
AIBG ID
2.37%
$113,897,732
($27,685,102)
HARGREAVES LANSDOWN
HL/ LN
5.21%
$180,541,703
($26,926,828)
SCHRODERS PLC
SDR LN
2.79%
$142,846,722
($22,773,752)
YAPI KREDI BANKASI
YKBNK TI
0.11%
$1,767,210
($22,552,249)
FINECOBANK SPA
FBK IM
0.75%
$69,392,408
($22,235,154)
OTP BANK PLC
OTP HB
0.25%
$15,452,584
($18,781,025)
VIRGIN MONEY UK PLC
VMUK LN
0.30%
$6,564,259
($18,511,400)
AJ BELL PLC
AJB LN
0.26%
$3,248,573
($14,886,075)
TBC BANK GROUP PLC
TBCG LN
0.94%
$11,793,551
($12,709,077)
With Credit Suisse seeing a total of $260 million of new short selling over the last thirty days:
Credit Suisse Shares Shorted
Ticker
SI % Float
Short Interest
30D Change Shares Shorted
CREDIT SUISSE GROUP AG
CSGN SW
4.18%
$361,919,638
$251,075,499
CREDIT SUISSE GROUP AG-REG
CSGKF US
0.97%
$82,547,414
$6,268,897
CREDIT SUISSE GRP ADR
CS US
0.41%
$41,151,975
$2,491,208
Total
5.56%
$485,619,027
$259,835,604
Shorting the European Banking sector has not been a profitable trade in 2023 with short sellers down -$1.00 billion in year-to-date mark-to-market losses, down -$5.01% on an average short interest of $19.97 billion. The most profitable European Banking shorts in 2023 are:
Most Profitable Euro Bank YTD MTM P\L
Ticker
Avg Short Interest
YTD MTM P\L
P\L %
ING GROEP NV
INGA NA
$447,708,245
$37,281,423
8.33%
CREDIT SUISSE GROUP AG
CSGN SW
$305,868,320
$35,585,626
11.63%
UNICREDIT SPA
UCG IM
$463,188,378
$33,593,294
7.25%
PARTNERS GROUP HOLDING AG
PGHN SW
$195,708,508
$26,331,208
13.45%
SOCIETE GENERALE
GLE FP
$490,973,273
$22,854,545
4.65%
SVENSKA HANDELSBANKEN AB
SHBA SS
$408,946,600
$22,519,601
5.51%
EQT AB
EQT SS
$425,928,416
$17,656,034
4.15%
CREDIT SUISSE GROUP AG-REG
CSGKF US
$98,644,420
$11,796,047
11.96%
DNB BANK ASA
DNB NO
$149,512,901
$11,087,889
7.42%
DEUTSCHE BANK AG
DBK GR
$213,985,412
$9,954,476
4.65%
SKANDINAVISKA ENSKILDA BANKEN
SEBA SS
$352,846,074
$8,852,116
2.51%
EQT AB
EQBBF US
$120,231,524
$5,624,827
4.68%
RATOS AB-B SHS
RATOB SS
$24,190,746
$5,604,295
23.17%
JTC PLC
JTC LN
$52,322,455
$5,459,834
10.43%
JULIUS BAER GROUP LTD
BAER SW
$78,302,288
$5,391,016
6.88%
PARTNERS GROUP HOLDING AG
PGPHF US
$69,823,536
$5,188,010
7.43%
AZIMUT HLDG SPA
AZM IM
$24,282,771
$5,018,415
20.67%
HARGREAVES LANSDOWN
HL/ LN
$211,225,748
$4,873,708
2.31%
BANCA MONTE DEI PASCHI SIENA SPA
BMPS IM
$15,353,289
$4,828,718
31.45%
CREDIT SUISSE GRP ADR
CS US
$57,017,365
$4,653,570
8.16%
The least profitable European Banking shorts in 2023 are:
Least Profitable Euro Bank YTD MTM P\L
Ticker
Avg Short Interest
YTD MTM P\L
P\L %
BANCO SANTANDER SA
SAN SM
$922,095,895
($177,804,343)
-19.28%
BNP PARIBAS
BNP FP
$2,443,612,613
($132,100,897)
-5.41%
ABRDN PLC
ABDN LN
$646,121,373
($98,427,553)
-15.23%
BANCO BILBAO VIZCAYA ARGENTA
BBVA SM
$546,305,646
($66,168,938)
-12.11%
HSBC HOLDINGS PLC
5 HK
$746,207,940
($50,707,408)
-6.80%
STANDARD CHARTERED PLC
STAN LN
$179,538,869
($38,060,234)
-21.20%
UBS GROUP AG-REG
UBSG SW
$413,732,605
($36,756,770)
-8.88%
INTESA SANPAOLO SPA
ISP IM
$614,922,415
($36,636,510)
-5.96%
AVANZA BANK HOLDING AB
AZA SS
$351,018,662
($36,229,581)
-10.32%
CAIXABANK SA
CABK SM
$435,172,548
($34,899,760)
-8.02%
HSBC PLC ADR
HSBC US
$379,015,534
($34,065,279)
-8.99%
INTESA SANPAOLO SPA
IITSF US
$151,273,928
($31,014,904)
-20.50%
NORDEA BANK ABP
NDA FH
$300,146,306
($24,904,969)
-8.30%
CREDIT AGRICOLE
ACA FP
$301,642,285
($21,827,708)
-7.24%
HSBC HOLDINGS PLC
HBCYF US
$165,385,211
($21,715,098)
-13.13%
BANCO BPM SPA
BAMI IM
$44,902,881
($20,802,915)
-46.33%
BANCO COMERCIAL PORTUGUES-R
BCP PL
$59,489,082
($19,747,002)
-33.19%
FLATEXDEGIRO AG
FTK GR
$51,481,265
($18,587,278)
-36.10%
SWEDBANK AB
SWEDA SS
$372,635,870
($18,213,144)
-4.89%
HSBC HOLDINGS PLC
HSBA LN
$297,302,741
($17,786,110)
-5.98%
But in March we have seen a reversal of fortune in the European Banking sector with shorts up +$1.89 billion in month-to-date mark-to-market profits, up +8.04% on an average short interest of $25.52 billion. The most profitable European Banking shorts in March are:
Most Profitable Euro Bank March MTM P\L
Ticker
Avg Short Interest
YTD MTM P\L
P\L %
BNP PARIBAS
BNP FP
$2,935,501,521
$357,635,034
12.18%
UNICREDIT SPA
UCG IM
$1,249,524,892
$95,660,882
7.66%
HSBC HOLDINGS PLC
5 HK
$846,630,965
$81,917,513
9.68%
CREDIT SUISSE GROUP AG
CSGN SW
$379,739,953
$78,039,430
20.55%
SOCIETE GENERALE
GLE FP
$765,592,460
$74,442,372
9.72%
ING GROEP NV
INGA NA
$792,323,268
$73,709,945
9.30%
BANCO SANTANDER SA
SAN SM
$920,405,421
$63,398,682
6.89%
BANCO BILBAO VIZCAYA ARGENTA
BBVA SM
$671,437,082
$57,542,162
8.57%
INTESA SANPAOLO SPA
ISP IM
$1,121,936,477
$55,721,085
4.97%
SVENSKA HANDELSBANKEN AB
SHBA SS
$555,875,094
$49,257,405
8.86%
SWEDBANK AB
SWEDA SS
$451,377,005
$44,486,758
9.86%
EQT AB
EQT SS
$450,430,662
$42,210,283
9.37%
AVANZA BANK HOLDING AB
AZA SS
$366,082,301
$40,458,141
11.05%
SKANDINAVISKA ENSKILDA BANKEN
SEBA SS
$389,015,969
$35,294,708
9.07%
HSBC PLC ADR
HSBC US
$390,191,190
$33,704,085
8.64%
PARTNERS GROUP HOLDING AG
PGHN SW
$331,197,267
$31,880,746
9.63%
NORDEA BANK ABP
NDA SS
$416,227,932
$29,181,634
7.01%
EQT AB
EQBBF US
$128,786,896
$28,931,797
22.46%
UBS GROUP AG-REG
UBSG SW
$349,014,294
$27,366,017
7.84%
UBS GROUP AG-REG
UBS US
$315,407,940
$26,111,570
8.28%
The least profitable European Banking shorts in March are:
Least Profitable Euro Bank March MTM P\L
Ticker
Avg Short Interest
YTD MTM P\L
P\L %
AKBANK T.A.S.
AKBNK TI
$132,329,975
($7,977,674)
-6.03%
BANQUE CANTONALE VAUDOISE
BCVN SW
$134,960,230
($5,433,473)
-4.03%
FLATEXDEGIRO AG
FTK GR
$42,313,503
($1,920,938)
-4.54%
SKANDINAVISKA ENSKILDA BANKEN ABA
SVKEF US
$62,488,795
($1,044,045)
-1.67%
AURELIUS EQUITY OPPORTUNITIES
AR4 GR
$17,597,665
($805,797)
-4.58%
BRAIT PLC
BAT SJ
$5,688,484
($548,177)
-9.64%
TURK GARANTI BANKASI
GARAN TI
$2,946,079
($383,733)
-13.03%
YAPI KREDI BANKASI
YKBNK TI
$2,600,608
($301,110)
-11.58%
BANK OF GEORGIA GROUP PLC
BGEO LN
$4,122,780
($205,186)
-4.98%
FLATEXDEGIRO AG
FNNTF US
$6,897,850
($187,291)
-2.72%
The return to profitability of shorting in the European Banking sector was dramatic. For the year, 71% of every dollar shorted was an unprofitable trade but in March 95% of every dollar shorted was profitable trade.
Credit Suisse short sellers were up $111 million in mark-to-market profits today, but news of a liquidity backstop from the Swiss National Bank and the Swiss Financial Market Supervisory Authority FINMA may force shorts to give back some of those profits and possible trim their short exposure. Aftermarket trading in the Swiss shares are up +18% on the news.
With over 105 million shares of new C.S. short selling executed over the last thirty days, there is a high probability that short sellers will be quick to realize their recent mark-to-market profits and reduce their exposure in a trading position. We expect a significant amount of buy-to-covers helping buoy C.S.’s stock price if the aftermarket stock price rebound continues during trading hours. Today’s late news may turn the C.C. short trade into a shorter-term trade than expected, albeit still a profitable trade.
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