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Credit Suisse, Deutsche Bank could lose spots in European bluechip index: SocGen

Published 07/06/2016, 08:30 AM
Updated 07/06/2016, 08:40 AM
© Reuters. A man enters the Credit Suisse offices in the Manhattan borough of New York
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LONDON (Reuters) - The halving in value this year of shares in Credit Suisse (SIX:CSGN) and Deutsche Bank (DE:DBKGn) and their slide to record lows have raised the prospect of both exiting an index of Europe's top bluechips (STOXX50), according to analysts at Societe Generale (PA:SOGN).

The next annual review by index provider STOXX is scheduled for September 2016 and any changes will take into account prices at the end of August.

STOXX could initiate a "fast exit" for Credit Suisse and Deutsche Bank shares from the STOXX 50 if they rank below 74 at the end of next month in a selection list that rates European stocks on the basis on market cap and daily turnover.

Infrastructure firms Vinci (PA:SGEF) and Spain's Iberdrola (MC:IBE) could potentially replace them, SocGen adds.

Credit Suisse and Deutsche Bank have lost 55 percent and 49.3 percent respectively this year as Britain's decision to leave the European Union worsened an already grim outlook for the banks hamstrung by sluggish markets, high regulatory costs and fines.

© Reuters. A man enters the Credit Suisse offices in the Manhattan borough of New York

Last week, the International Monetary Fund said Deutsche Bank's links to the world's largest lenders make it a bigger potential risk to the wider financial system than any other global bank.

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