NEW YORK (TheStreet) -- European banks face a "massive" gap in the health of their balance sheets compared with U.S. peers, according to Olivier Sarkozy, head of the financial-services group at The Carlyle Group (CG), which has been looking to buy assets from troubled institutions in the region.
"The crisis that you saw in '08-'09 here in the United States is playing itself out frame for frame in Europe," Sarkozy told Bloomberg Television on Monday. "It's playing itself out in a calmer environment because regulators and politicians now understand what is at the heart of this issue but the math in Europe is dramatically larger and that's principally because while the economy in Europe is the same size as the economy here and the overall level of debt in Europe is the same size as it is here, in Europe the debt sits firmly on the books of the banking system and so their banking system is four times the size of the United States."
Indeed, TheStreet's Antoine Gara recently pointed to the discrepancy between European and U.S. bank balance sheets, noting that Deutsche Bank (DB) paid out a 75-cent dividend in 2012 roughly equal to its annual earnings. By contrast, Citigroup (C) paid out roughly $120 million in 2012 dividends on $7.5 billion in earnings, and Bank of America (BAC) paid $400 million in dividends on $4 billion in profits.
Carlyle's Sarkozy sees a "dramatic need" for European banks to reduce leverage, as he says $55 trillion in assets is funded with just $19 trillion of deposits.Carlyle has been looking to take advantage of this discrepancy by buying assets from Europe's banks. For example, it recently teamed up with management of TCW Group to acquire the asset manager from Societe Generale (SCGLY). Sarkozy, who is the half-brother of former French President Nicolas Sarkozy, says Carlyle will continue to look for similar opportunities driven by the deleveraging of Europe's banks as well as "the politicized re-regulation of what amounts to one of the world's most complex and second-largest industries." -- Written by Dan Freed in New York Follow @dan_freed
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV