Italy, Spain, Greece and Portugal could suffer from the UK’s vote to leave the European Union, the Bank of America has said in a regulatory filing.
“A return of political stress or financial instability in these countries could disrupt financial markets and have a detrimental impact on global economic conditions and sovereign and non-sovereign debt in these countries,” the bank said in the SEC filing.
It also noted its business could be adversely impacted if Brexit negotiations limited its ability to do business in the EU and if the negotiating period resulted in economic and political uncertainty.
It said its net exposure to Italy at the end of June was $4.8bn, while to Spain, Greece and Portugal it was $2.6bn, $261m and $10m respectively.
The bank said Brexit had led to “political and economic uncertainty” that was set to last for several years, and noted that its net exposure to the UK economy was $56.3bn concentrated in multinational corporations and sovereign clients.
The bank’s activities in the Emea region, including the UK, account for 7 per cent of revenues.
“The timing of the UK’s formal commencement of the exit process is uncertain. Once the exit process begins, negotiations to agree on the terms of the exit are expected to be a multi-year process. During this transition period, the ultimate impact of the UK’s exit from the EU may remain unclear and economic and market volatility may continue to occur,” the filing said.
“If the terms of the exit limit the ability of our UK entities to conduct business in the EU or otherwise result in a significant increase in economic barriers between the UK and the EU, these changes could impose additional costs on us, and could adversely impact our business, financial condition and operational model,” it added.