Short sellers target shares of Credit Suisse (CS), BNP Paribas and other banks

Short-sellers betting against the European banking sector, particularly BNP Paribas, are set to make almost $2bn in profit in the month of March, according to S3 Partners, which provides stock market data. BNP has yielded $357m in as yet unrealised profits in March. Intesa Sanpaolo and Unicredit of Italy are also targets, with the two banks the second and third-largest respectively. Data from S3 indicated that bets against European banks were nursing unrealised losses of $1bn year-to-date on a total short interest of nearly $20bn. However, in March, shorts for European banks are up $1.89bn in month-to-date mark-to-market profits, up +8.04% on an average short interest of $23.52bn. Hedge funds, many with short positions, have also faced significant losses on their portfolios elsewhere due to large short-term movements in equities and bond prices. Swiss investment bank UBS has said many have “significantly reduced their long positions in equities… selling $25-$30bn worth of stocks since the announcement of the SVB collapse.” They warned clients that “more selling flows are coming,” which will eliminate hedge funds’ exposure to equities in the short term.



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