european banks already tormented by low interest rates and economic uncertainty face new anxieties from u.s. president-elect donald trump <u+2019>s surprise victory , analysts say, such as potential hits to their profits from trade financing and investment banking. at a time when several big european banks themselves face pressure to tap the markets for capital, analysts and bankers say mr. trump<u+2019>s election win could make investors more nervous about putting money into weakened lenders. <u+201c>this is not the environment you want to go out in and raise money,<u+201d> bernstein research banking analyst chirantan barua said. <u+201c>if you are undercapitalized you will suffer.<u+201d> investors and analysts expect lenders including deutsche bank ag , unicredit spa and banca monte dei paschi di siena spa to go to investors for capital in coming months. spokespeople for the banks declined to comment<u+00a0>wednesday. deutsche bank has said it has no plans to raise capital. european bank stocks were broadly stable after an initial bout of jitters<u+00a0>on wednesday. the stoxx europe 600 banks index was down around 1.6% at<u+00a0>12:30 p.m. gmt. <u+2018> this is not the environment you want to go out in and raise money. <u+2019> in coming weeks, the u.s. election outcome could benefit banks<u+2019> trading businesses, as clients adjust positions to account for perceived risks in markets for currencies, bonds, stocks and other assets. over time, a trump administration could dial back financial-services regulation, particularly with republicans controlling both houses of congress, potentially lowering banks<u+2019> regulatory costs. but corporate clients might hold back on issuing debt or equity in coming weeks, especially if they were undecided ahead of the election, analysts and bankers said. a pullback in new issuance of bonds or shares would eat into investment banking profits. but investors also saw that the harshest predictions ahead of the u.k.<u+2019>s brexit vote turned out to be extreme. many big european banks reported stronger-than-expected profits in the third quarter. still, several european banks rely heavily on the u.s. markets to drive profits.<u+00a0>british lender barclays<u+00a0>plc , for instance, makes about a third of its revenue in the u.s., including through its u.s. credit card business and new york-based investment bank. any economic slowdown there would hit on its bottom line. analysts said<u+00a0>wednesday<u+00a0>that bond markets need time to digest how government borrowing costs and tax policies could change. mr. trump<u+2019>s victory added to uncertainty over whether the u.s. will raise interest rates, and it is unclear how his policies will affect emerging-market countries heavily dependent on u.s. trading relationships. companies that generate deal fees for banks could suffer <u+201c>uncertainty shock<u+201d> as they wait to see how mr. trump<u+2019>s policies take shape, mark doms, a senior u.s.-based economist at nomura holdings inc., said<u+00a0>wednesday. analysts said the wave of voter sentiment that helped a businessman and untested politician upset hillary clinton, a seasoned public official, makes upcoming european votes in france, italy, germany and elsewhere look less predictable. for europe<u+2019>s asia-focused banks, hsbc holdings plc and standard chartered plc, the trump victory could mean a double whammy from lower global trade and a delay in u.s. rate increases. hsbc, the world<u+2019>s largest trade finance bank by market share, also faces a longer slog selling down its pre-financial crisis u.s. consumer loan book and freeing up capital in the country, bernstein banking analysts said<u+00a0>wednesday. analysts had penciled in around $10 billion in capital coming out of the u.s. business that could be reinvested or returned to shareholders through share buybacks. shares of banco<u+00a0>bilbao vizcaya argentaria s.a. declined by 8.6%<u+00a0>wednesday<u+00a0>morning, as shareholders worried about the bank<u+2019>s stake in mexico and potential fallout from mr. trump<u+2019>s policies. the mexican peso<u+2019>s record decline against the u.s. dollar will have <u+201c>a negligible impact on capital due to our current hedging positions,<u+201d> bbva said. mr. trump has vowed to tear up the north american free trade agreement. bbva said his victory speech <u+201c>was<u+00a0>an institutional one that called for greater economic growth and good relationships with other nations.<u+201d> early<u+00a0>wednesday, jefferies analysts downgraded bbva shares to hold from buy. <u+2014>giovanni legorano contributed to this article. write to jenny strasburg at jenny.strasburg@wsj.com , max colchester at max.colchester@wsj.com and margot patrick at margot.patrick@wsj.com
european banks face new worries in wake of trump victory  - wsj
jenny strasburg max colchester margot patrick