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
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.
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