For investors who placed their trust in the EU's leading banking stocks, the results were more than positive, with impressive gains: Banco Santander (+48%), Banco de Sabadell (+96%), Deutsche Bank (+56%), Unicaja Banco (+40%), Banca Monte dei Paschi (+124%), Bankinter (+29%), Unicredit (+96%), BBVA (+61%), CaixaBank (+52%), Intesa Sanpaolo (+52%), ING Groep (+34%), HSBC (+17%), BNP Paribas (+18%), and other big names such as Barclays (+22%) and Commerzbank (+33%).
Fuente: MarketScreener
UniCredit SpA increased its market value to 59.16 billion euros, ranking seventh among Europe's 20 largest banks. Its shares have climbed more than 40% since the beginning of the year and have almost doubled over the last 12 months. Intesa Sanpaolo SpA, another Italian bank, saw its market capitalization grow by 27%. After a year of record profitability in 2023, UniCredit and Intesa Sanpaolo announced substantial capital returns for their shareholders, with dividends of €7.7 billion and €5.4 billion respectively, plus €1.7 billion in share buybacks for Intesa. In Spain, BBVA recorded the second-highest increase in market capitalization, closely followed by CaixaBank SA and Banco Santander SA, both of which recorded increases of almost 19%. Santander also plans to distribute over 5.5 billion euros to shareholders.
The main banks in Italy and Spain benefited from the positive impact of rising interest rates in Europe and the US. This was reflected in particular in higher fees and commissions on asset management and payments, as well as growth in net interest income. Stable trading revenues and better-than-expected performances in commercial banking, retail banking and financial services reinforced this dynamic. With rising net interest income, a stable loan portfolio and increasing assets under management, the prospects for a sustained improvement in earnings for the European financial sector are more than promising.

Performance of European banks over the past year compared with the Stoxx Europe 600

Source: Zonebourse

The wave of consolidation continues in the European banking sector

Consolidation in the banking sector continues, spurred on by tighter regulations and the vulnerability of certain financial institutions, as illustrated by Credit Suisse's planned merger with UBS in 2023. Against this backdrop, BBVA has reiterated its interest in buying Banco Sabadell, offering over 12 billion euros, reviving a previously aborted attempt four years ago. The deal, which aims to cut costs and increase scale in the Spanish banking sector, could coincide with anticipated interest rate cuts by the European Central Bank. If successful, the alliance between BBVA and Sabadell would create a banking giant with over 100 million customers and assets in excess of one trillion euros, ranking just behind Banco Santander in Spain. With a market capitalization of $65 billion, BBVA ranks as the third-largest bank in the euro zone, ahead only of BNP Paribas and Banco Santander, and followed by HSBC and UBS Group in Europe.

Source: S&P Global