Show less
Morning Call: Softer dollar boosts commodities, stocks
21 September 2018 at 7:40 GMT
Morning Call: Markets stabilise as trade tensions ease
20 September 2018 at 8:28 GMT
Morning Call: Chinese shares surge as trade war rages on
19 September 2018 at 8:36 GMT
Today’s FX chart analysis - video
John J Hardy
18 September 2018 at 10:28 GMT
Morning Call: Trump hits China with tariff plan
18 September 2018 at 7:29 GMT
The week ahead in macro
Kay Van-Petersen
17 September 2018 at 8:11 GMT
Macro Monday week 38: Keep Global Macro and Carry On
Kay Van-Petersen
17 September 2018 at 8:02 GMT
Morning Call: US yield curve lifts, boosting dollar
17 September 2018 at 7:23 GMT
Technical analysis webinar – A view of the market: Larsson
Kim Cramer Larsson
12 September 2018 at 14:44 GMT
Morning Call: Chinese shares fall further
11 September 2018 at 8:36 GMT
Morning Call: USD, SEK in focus
10 September 2018 at 7:49 GMT
The week ahead in macro
Kay Van-Petersen
10 September 2018 at 7:37 GMT
Morning Call: Is Japan next?
07 September 2018 at 7:35 GMT
Video / 01 May 2014 at 10:18 GMT

Banks bounce back

Peter Garnry

European banks remain undervalued according to Saxo Bank’s Head of Equity Strategy, Peter Garnry.

In the years after the 2008 economic crisis, European banks have endured a much slower recovery than US banks. This is in part due to the fact that Europe’s economy experienced the financial impact of the Great Recession much later than the US; but with two of Europe’s biggest banks now reporting solid first quarter results the signs of a recovery for European banks may be here.

Lloyds Banking Group reported pretax profit had increased by 22 percent. The positive results have prompted Lloyds to consider applying for permission from the Bank of England to reestablish its dividend payment rights during the second half of the year. The bank has not made a dividend payment since the start of the economic crisis.

Support for Lloyds recovery is evident in the impending IPO of one of its assets: TSB Bank. The bank has a current valuation of GBP 1.5 billion and could become publicly available as early as mid-June. The British government is seizing this moment of opportune strength by reducing its stake in the company to 25 percent. Last year the government owned 39 percent of Lloyds. 

The European banking index is up 0.2 percent at the open, after the S&P downgraded 15 major European banks from ‘stable’ to ‘negative’.

On Tuesday the S&P announced change in ratings standards after European lawmakers approved legislation making it harder for governments to assist in offering aid to banks. The S&P also raised its outlook on 38 banks including Danske Bank from ‘negative’ to ‘stable’ ahead of the banks promising first quarter results were released.

Danske Bank surpassed analysts’ expectations reporting USD 674.3 million in pretax profit. Competitors Jyske Bank and Sydbank failed to beat analysts’ forecasts. 

European banks in general are still trading well below pre-crisis levels. Large banks like Deutsche Bank AG, USB AG, and Credit Suisse Group AG are currently trading at levels less than half of their 2008 prices. Garnry views this as a possible investment opportunity ahead of the European banks recovery.




The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail