In this CIO Viewpoint Equity – European Financials: Between short-term political uncertainties and sound fundamentals – we discuss recent volatility related to the French elections, the sector’s sound fundamentals and why it has the potential to continue its year-to-date outperformance.
Key takeaways:
- STOXX 600 Banks is the best-performing subsector in Europe, up 24% YTD despite short-term STOXX 600 underperformance.
- Stable net interest income (NII) due to increasing loan volumes and rising fees may contribute to further outperformance for European banks.
- Financial Services could also potentially pick up, helped by decreasing interest rates.