BI European Banks: 2024 Credit Outlook

European bank bonds could see positive excess returns in 2024, given spreads are still relatively wide, despite the rally of the past 1-2 months. Themes that could affect performance include: stagnating loan growth, continuing CRE stress, higher capital requirements, lots of AT1 calls and LME. Issuance may come down due to heavy pre-funding, lower funding needs and MREL surpluses. UBS, Societe Generale, Barclays, Deutsche Bank and Sabadell are among the issuers that could be in focus.