Barclays (BARC) Plc, the U.K.’s third- largest lender by assets, took 8.2 billion euros ($10.9 billion) of three-year loans from the European Central Bank to provide “funding stability” for its units in Spain and Portugal.
Banco de Espana will access 6.2 billion euros from the auction on Feb. 29 and the remaining 2 billion euros via Banco de Portugal, London-based Barclays said in a statement today.
“The funds provided through this facility will be used to manage the risk associated with mismatches between Barclays Euro-denominated assets and deposits in markets where Barclays has significant local operations,” Barclays said in the statement.
The European Central Bank is providing the region’s banking system with cheap money in an effort to avert a credit crunch after the market for unsecured bank debt seized up last year and funding from U.S. money markets disappeared. Any bank in the region can borrow an unlimited amount, provided it pledges eligible collateral. Lenders won’t face curbs on bonuses or dividends, according to the ECB.
Lloyds Banking Group Plc (LLOY), Britain’s second-biggest taxpayer-assisted lender, said on Feb 29 that it took 11.4 billion pounds of three-year loans from the ECB. HSBC Holdings Plc, Europe’s biggest bank, also said last month that it would take about 350 million euros of loans at the auction after taking 5.2 billion euros previously.
To contact the reporter on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net
To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net
