Short positions are building in Credit Suisse, but it’s still not the European bank with the most bets against it.

Short interest in the last month has ramped up 2% by $167 million to a total $303 million, S3 says.

It’s likely because Credit Suisse
CSGN,
+1.29%

CS,
-6.22%
is undergoing a restructuring. CEO Ulrich Korner attempted to draw attention away from its 12% stock price slump on Monday, saying the bank maintained a “strong capital base and liquidity position.”

Credit Suisse shares fell 4% in Zurich trade on Wednesday and have dropped 53% this year.

The bank is still reeling from the collapse of two major firms – U.S. family office Archegos and U.K finance firm Greensill -– which cost Credit Suisse billions of dollars and ignited the need to restructure.

Credit-default swaps, which are bets on whether an issuer will collapse, have climbed past levels during the 2008 financial crisis.

In a new report by S3 Partners, Ihor Dusaniwsky managing director of predictive analytics, and Matthew Unterman, director of predictive analytics, the firm predicted that with its recent market volatility, Credit Suisse “should see continue short selling in the stock as traders look to increase their exposure.”

Dusaniwsky told MarketWatch that Credit Suisse isn’t the most shorted European bank stock because of its plan to become “more efficient and better capitalized as such.”

“I think that the shorts are waiting to see what happens and what’s announced,” he explained.

Meanwhile, French lender BNP Paribas
BNP,
-0.87%
ranked first with the largest consolidated short interest of 4% or $1.68 billion, followed by U.K.-headquartered bank HSBC
HSBA,
+0.13%

HSBC,
-2.63%
and Finnish lender Nordea
NDA.FI,
+0.26%
both with $1.1 billion in short interest.

European banks with the largest increase in short selling in the last 30 days:

The reason why bets against Nordea have stacked up significantly in the last month is due to its size and notoriety as Finland’s largest bank, leaving it well exposed to risky banking conditions, said Dusaniwsky.

“Nordea Bank increased short interest can be attributed to a familiar set of reasons: rising interest rates, high inflation, FX weakness and housing market weakness.

“Just recently we have seen Bridgewater Associates LP disclose a $30.5 million short position in the bank,” he said.

With the Fed and the Bank of England raising interest rates and the assumption that European central banks will follow suit, Dusaniwsky explained that short sellers will see that as a sign to rebuild their exposure.

“Big banks that have the most exposure to interest rates and have the most exposure to credit counterparties are going to have the biggest short interest just because they’re going to feel the effects straight on,” Dusaniwsky added.

Going forward, the biggest factor impacting banks’ short interest will be currency swings and interest rates. European currencies’ weakened stance against the U.S dollar will see capital flows going in and out of European banks and rising rates will make them look more profitable in the short to medium term, Dusaniwsky says.

“We might see short interest in some banks going down because their near-term and medium-term profit estimates look better,” he said.