Measured optimism for European banks
The vagaries of the economic recovery and the prospect of new banking regulations temper the optimism of investors after quarterly results exceeded expectations published this week by several major European banks.
Reversals of impairment greater than expected second quarter have offset the slowdown in investment banking, penalized by the threats of contagion of the crisis of the Greek sovereign debt investors who scalded.
Societe Generale has reported a profit of nearly one and half times higher than expected, and Standard Chartered, which operates mainly in Asia, has released a record result.
Lloyds has returned to the green to the first half thanks to a halving of asset impairments.
However, European banks have not divested of their caution, particularly when faced with the consequences of coming prudential reforms.Although the deadlines for application of solvency ratios so-called "Basel III have been repulsed, concerns remain about them.
"There is fragility in the global economy and nervousness in financial markets," said John Peace, Chairman of StanChart, adding that British banks were particularly disadvantaged by the rules on pay, taxation and financial regulation.
Most European banks which have published their results on Wednesday have followed the trend shown Monday by BNP Paribas and HSBC with a lower level of bad debts.
However, even if SocGen gained 0.6% at the Paris Stock Exchange in the afternoon, StanChart lost 6.3% to the London Stock Exchange.
The quarterly results and the prudence of banks are an excuse for profit taking while the lure investors to the sector had been increased by the publication, July 23, heartening results of resistance tests suffered by banks in the European Union.
The European banking stocks index yielded 1.2% on Wednesday afternoon, after having won over 20% since early July against 10% for pan-European Stoxx 600 index – and nearly 9% since the release of stress tests .
"The results show that emerging markets like China, India and Brazil are areas where we can go to generate meaningful activities," said Ted Huang, a fund manager Pinebridge Asia High Yield in the results of StanChart.
Against the trend, the German Postbank increased its provisions for impairment related to risky real estate loans and has revised downwards its objectives.
Allied Irish Banks The Irish, partly nationalized, has also reported a doubling of losses in the first half while making clear progress towards its recapitalization.
These two facilities join the Italian UniCredit, the first credit agency in Central and Eastern Europe, which was published on Tuesday a quarterly profit well below consensus, hit by a dramatic drop in trading revenue.