Revisiting European Banks

Revisiting European Banks

Trade in Soda;

The credit crisis was 15 years ago, and despite the economy marching on, the banks continued to jump from crisis to crisis. They’ve been accused of money laundering, price fixing and more. Worst of all was the reckless lending practices and poor risk management pre-2007. They lost the public’s trust and have been slammed with $321 billion in fines since.

Their share prices have languished too, as profits have failed to recover. But ever since interest rates normalised, that has changed. With higher rates, the banks are making money, and profits are heading back to the pre-2007 good times.

European Banks See Profits Rising

Source: Bloomberg

What’s more, this 15-year period of pain has not just seen branches close at pace, but the number of employees reduced too. The European bank sector employed 2.7 million people before the crisis, and today, just 2 million. That’s an enormous cost cut.

But there are still things to worry about. What if the economy tips into a recession and house prices or commercial property crash? What if another bank blows up again, like Silicon Valley Bank last year? These are things to worry about, but there comes a time when you cannot ignore what the market is telling you.

The Multi-Asset Investor is issued by ByteTree Asset Management Ltd, an appointed representative of Strata Global which is authorised and regulated by the Financial Conduct Authority. ByteTree Asset Management is a wholly owned subsidiary of CryptoComposite Ltd.

General - Your capital is at risk when you invest, never risk more than you can afford to lose. Past performance and forecasts are not reliable indicators of future results. Bid/offer spreads, commissions, fees and other charges can reduce returns from investments. There is no guarantee dividends will be paid. Overseas shares - Some recommendations may be denominated in a currency other than sterling. The return from these may increase or decrease as a result of currency fluctuations. Any dividends will be taxed at source in the country of issue.

Funds - Fund performance relies on the performance of the underlying investments, and there is counterparty default risk which could result in a loss not represented by the underlying investment. Exchange Traded Funds (ETFs) with derivative exposure (leveraged or inverted ETFs) are highly speculative and are not suitable for risk-averse investors.

Bonds - Investing in bonds carries interest rate risk. A bondholder has committed to receiving a fixed rate of return for a fixed period. If the market interest rate rises from the date of the bond's purchase, the bond's price will fall. There is also the risk that the bond issuer could default on their obligations to pay interest as scheduled, or to repay capital at the maturity of the bond.

Taxation - Profits from investments, and any profits from converting cryptocurrency back into fiat currency is subject to capital gains tax. Tax treatment depends on individual circumstances and may be subject to change.

Investment Director: Charlie Morris. Editors or contributors may have an interest in recommendations. Information and opinions expressed do not necessarily reflect the views of other editors/contributors of CryptoComposite Ltd. ByteTree Asset Management (FRN 933150) is an Appointed Representative of Strata Global Ltd (FRN 563834), which is regulated by the Financial Conduct Authority.

© 2024 Crypto Composite Ltd