Tuesday, 3 December 2024, 15:30 CET

Spanish banks enjoyed a strong Q3 driven again by high interest margins and low provisions. The challenge now is to return to steady loan growth while generating more commissions as interest margins shrink. Extension of the bank tax could erode profits.

Italian banks have revised their 2024 earnings forecasts after strong nine-month results underpinned by resilient net interest income, a rebound in fees, and solid credit quality. Lenders are now focused on stabilising profits through the rate cycle.

Homeowners in some European markets prefer floating-rate mortgages while others prefer longer-dated fixed interest rates. Given that borrowing costs are all linked to the same ECB rates, this is somewhat counter intuitive.

The recent UK Court of Appeal ruling in favour of consumers on undisclosed commissions on car finance is expected to have a moderate impact on UK banks rated by Scope, reducing profits at some banks but not posing systemic risk.

With sovereign credit quality reflecting fiscal and economic challenges, the Draghi report offered valuable insights into how to address some structural issues facing the euro area. But the report was notably silent on the contribution of covered bonds.

DNB’s acquisition of Carnegie, subject to regulatory approval, marks a strategic move that strengthens the Norwegian lender’s business model while opening up growth opportunities in the Nordic region.

In 1769, Frederick the Great, King of Prussia, introduced the legal basis for an instrument that developed into Germany’s Pfandbrief, the forerunner of all covered bonds. How would he have reacted to the Draghi report on European competitiveness?

UniCredit’s stake build in Commerzbank has highlighted that governments still hold stakes in their national champions. Selling them offers bank buyers a unique opportunity to reinforce their positions in foreign markets or enter new markets at scale.

Within two months, most European banks will be subject to final Basel 3 standards aimed at strengthening the resilience and stability of banks. We do not expect further major changes to the regulatory framework although there are likely to be refinements.