ECB board member Fernandez-Bollo insists that big European banks still have room to grow

Since Covid, European banks have focused on share buybacks rather than prioritizing capital accumulated during the pandemic for growth.

Below-book share prices mean that banks have been able to buy back their own stock cheaply, at a steep discount to equity value. This year, investors’ concerns about the impact of the war in Ukraine on the European economy have dashed any hopes that European bank stocks would rise above book and incentivize institutions to invest more capital in growth such as M&A.