An Earnings Beat Doesn’t Help Banks’ Bleak Outlook

Once again, European banks tried hard in the latest earnings season, but ultimately failed to boost sentiment, Bloomberg News reported. Expectations were low and hence several lenders were able to post a beat, yet many banks warned of a challenging outlook as yields in Europe hit all-time lows. Citigroup notes that seven out of nine regional markets under their coverage were able to surpass estimates, with the strongest positive surprises from Spanish and Swiss lenders. But the results were not enough to create a lasting positive impact overall as analysts pointed to low quality numbers driven by investment banking, which might not be sustainable, or lower provisions and other one-time effects. Read more

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