LONDON/FRANKFURT/MADRID, April 22 (Reuters) – Investors should get a clearer picture this week of whether higher interest rates are still boosting European bank profits or if a year-long share price rally will run out of steam.
Britain’s Lloyds Banking Group (LLOY.L), opens new tab is the first of the big European lenders to report its first quarter earnings on April 24, before BNP Paribas (BNPP.PA), opens new tab, Deutsche Bank (DBKGn.DE), opens new tab and Barclays (BARC.L), opens new tab publish theirs the following day.
After years of low interest rates, a surge in borrowing costs has been a game changer for bank profits in Europe, whose shares have soared on the resulting shareholder payouts.
“What is fundamentally different is that we are out of negative rates. That has had a fundamental impact on the outlook (for banks) and it still does,” said Christian Edelman, Co-Head of Europe at consulting group Oliver Wyman.
Source: REUTER
