10th consecutive quarterly result
- with European banks beating analysts' consensus.
- 95% of banks delivered net results in line with or above consensus.
Earnings momentum still intact
- 75% of eurozone banks improved their FY23 guidance
- 2023e net income growth of c. 30%-35% vs. 2022
- Index aggregate ROE > 11% for 2023e (vs. last decade peak of 8%)
Results driven by a range of positive factors
- Net interest income continued to surprise positively (peak now expected in H1 24 in Spain and Italy)
- Good cost control
- No sign of asset quality deterioration: provisions 14% below consensus and cost of risk guidance maintained
- Capital beats prompted further buyback announcements: HSBC, BBVA, Barclays, Caixa, UCG, etc.
Valuation
- European banks have not rerated as investors remain concerned with the credit cycle, competition for deposits and political interference