The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Don’t paint Europe’s banks with the same brush

US-dominated investors make it harder for good banks to shine through.


The accepted wisdom that European banking is an unmitigated basket case has become even more entrenched over the past year. While most banks in the region traded well below book value a year ago, since then their shares have fallen by about a third, and despite a brief rally early in early 2019, they have since fallen back to roughly the level of late 2018.

It is easy to see why.

Negative central bank interest rates bring the fundamentals of banking into question and erode the time value of money. The likelihood of higher base rates in Europe has become more remote while money-laundering scandals and fines have hit even the well-performing Nordic exceptions.

No wonder there is an increasing tendency to paint all European banks with the same brush – unless there is a big and blindingly obvious reason to do otherwise (such as Asia, for HSBC).

Sentiment will always move markets, but in Europe’s case perceptions rather than fundamentals are more influential because of the underdevelopment of its capital markets. This is a problem for bank business models, as it makes their balance sheets less dynamic, and it makes European issuers more reliant on American equity investors, who are more likely to look at the continent as a whole.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree