Dear investors,
The Axiom Alternative Investment team would like to thank you for registering in our webinar.
In order to find the analysis of David Benamou, CIO, and Antonio Roman, Portfolio Manager, on the Q2 2026 results of European financials, please find attached the presentation material and the replay link here.
1. Another record quarter for European financials
- Banks performance was overall excellent, with more than 90% of banks beating expectations and 80% seeing positive forward EPS revisions.
- Versus consensus, pre-tax profit came in 6% higher. EPS forecasts were revised up 2% for 2026 and 1% for 2027.
- NII was up 1% and fees up 4%, exceptionally strong in equity trading, IB and asset gathering on the back of IPOs and hyperscaler issuance.
- Costs remain under control and credit quality is benign, with a stable NPL ratio of 1.9%. Consumer finance, office CRE and SMEs remain areas to watch.
- Elsewhere: online platforms, exchanges and traditional asset managers posted solid NII and volume-driven upgrades.
- In insurance: solvency and capital generation are at record levels, life continues to post strong inflows, but premium growth in P&C/reinsurance is slowing overall.
2. The earnings momentum is likely to persist
- NII remains supported by volumes and rate levels: Greece, the Netherlands, Norway, Denmark and Ireland lead, while France, Austria and Finland are lagging. The recent rise in rates has had no impact on deposit costs, and the customer margin of European banks has returned to its long-term average.
- Wealth management, asset management and life insurance are seeing record net inflow momentum, despite concerns around Chinese cross-border flows. Capital markets continue to benefit from AI-driven volatility and a solid pipeline of new mandates.
- There are no signs of asset quality deterioration. Regulation is turning supportive for the banking sector (the Commission's 38-point proposal, output floor / FRTB, securitisation, SIU).
- Consolidation keeps building, both in number of deals and in deal size (UCG–Commerz increasingly credible).
- Margins in P&C insurance and reinsurance continue to improve, but at a slower pace.
3. Key sector debates and portfolio positioning Diversification of performance drivers: banks, exchanges, brokers, reinsurers
- Unresolved issues remain: energy inventories continue to draw down; sovereign bond spreads could widen on the back of surging debt servicing costs and the electoral calendar; bond yields, should they keep rising, could slow loan and deposit growth; weak labour markets could deepen the difficulties of the most vulnerable issuers; Chinese competition in AI is intensifying, while AI-related debt is creating new risks.
- Despite solid fundamentals and reasonable valuations, multiple expansion in the banking sector could be constrained by these factors over the coming months.
- Diversifying into exchanges, brokers, (re)insurers and REITs offers a way to achieve similar totalreturns while reducing macro sensitivity.
The entire team at Axiom Alternative Investments is here to help should you have any questions.