They will still be registered as companies, so shareholders' equity may not be wiped out.
Of these, he says, three-fifths had no provisions, equivalent to more than the bank's total shareholders' equity of euro5.7 billion.
This month Nikko announced it was reserving 10% of its shareholders' equity for a new division to invest in Japanese start-ups.
Ssangyong Oil Refining, the biggest shareholder in Ssangyong Motor, boasts shareholders' equity of 1.1 trillion won and a capital-reserve ratio of 385%.
In another measure, the ratio of price to tangible book value (shareholders' equity minus intangibles like goodwill), Citi is close to typical at 3.6.
Because they would have to take a corresponding hit to earnings, and also, with shareholders' equity depressed, would find their ability to lend somewhat constrained.
Cornell looks for publicly traded subsidiaries that are trading at fat discounts to their offering prices and have discernible value, in cash, shareholders' equity or growth potential.
Such a public step would probably give the government no option but to force some executives to resign and to wipe out shareholders' equity in return for the fresh capital.
This would increase shareholders' returns by reducing the supply of equity.
But if banks have months to reach their target, they can avoid raising new equity, which would dilute their shareholders' stakes, and instead move to the required ratio by shrinking their balance-sheets.
The private equity group's offer would "allow shareholders to release an immediate cash return" and it would "avoid the uncertainty seen in all other alternatives, " he underscored.
The nationalisation that, for good reason, wiped out Fannie's and Freddie's shareholders has made it riskier for others to put fresh equity into ailing banks.
This can't be a bailout of private-equity firms or existing shareholders.
Paribas, the country's leading merchant bank, said it would boost its return on equity by buying out minority shareholders in two big subsidiaries.
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