European Banks After the €450 Bn Rally – Rate Cuts Vs. M&A, Buybacks: BI Replay
Surging interest rates has driven a revenue-driven upgrade cycle for European banks, but the party may soon be over. ECB rates cuts of up to 150 bps over 12-months and rising impairments threaten to reverse that. Valuations at 6-7x earnings are not stretched, as surplus capital triggers M&A and share buyback opportunities.