Rising rates boost bank earnings. Bank executives told investors through years of quantitative easing and negative rates that when rates turned round and went up again, everyone would finally see just how much profit banks can make.
But now that central banks are hiking in 75 basis point leaps, investors don’t seem to like it much, especially in Europe. This is despite the fact that net interest income has shown double-digit growth in 2022 and banks easily beat consensus earnings estimates for the second quarter, pushing some governments towards windfall taxes.
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