Return to pre-crisis profitability for European banks

Profitability streak is noted for their progress since before the 2008 global financial crisis, as higher interest rates have done wonders for their shares, according to a Bloomberg report. The European Stockx 600 banking index gained 13% in the first quarter and rose for six consecutive quarters for the first time since 2006. The Italian and Spanish banks, such as UniCredit SpA and Banco Bilbao Vizcaya Argentaria SA, led the rise. According to Bloomberg, higher dividends and re-markets, as well as increased profits, have supported the industry, compensating for concerns about future interest rate reductions. And with future price multipliers to profits still around 50% lower than those on the wider market, some investors say the rally has legs. Singular Bank’s strategy chief, Roberto Scholtes said: “We expect the European banking sector to have a somewhat better performance than the average market in the coming months,” and completed, “We are going through the phase of the cycle in which profits are skyrocketed due to the increase in interest rates on another in which we predict an increase in multipliers, in a sector that is much more profitable and stable than a few years ago”.