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European banks under investor pressure to keep earnings growth alive

Bank share prices have broadly delivered a double-digit rise this year, driven by stock buyback programmes

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1 min read Last Updated : Oct 21 2024 | 4:28 PM IST
Europe's biggest banks are healthier than at any point since the 2008-09 financial crisis, but investors want reassurance that they can trust their longer term earnings power as interest rates fall. 
Bank share prices have broadly delivered a double-digit rise this year, driven by stock buyback programmes made possible by years of capital accumulation, restructuring, cost cuts and supportive central bank policy, which boosted their profits.
 
Deutsche Bank, Lloyds and Barclays will kick off third-quarter earnings reporting this week, while UBS and HSBC will be among those reporting next week. 
 
The numbers are expected to show continued profitability, with robust investment banking activity offsetting squeezes on margins and weak demand for loans among consumers and businesses. 
But investors want more. Besides looking for evidence of asset quality resilience, they are seeking sharper strategy, lower costs and the potential to outperform in a low growth global economy. 
Deal-making has captured the imagination of bank boards in the last three months. BNP Paribas bought AXA Investment Managers and UniCredit raised its stake in Germany's Commerzbank, stirring chatter on cross-border consolidation. 

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First Published: Oct 21 2024 | 4:28 PM IST

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