Capital distributions – via record dividends and a clear acceleration of action buyback programs – will reach a summit this year.
Is this the end of a long and painful cycle for European banks, in chronic sub-performance for fifteen years-since the great financial crisis of 2008-as they remain prisoners of sentence, of too low rate and too high requirements on the part of the regulator?
Or the beginning of a new era, now that their capitalization ratios are considered satisfactory by the latter, that the rates go up significantly and that the economies of the old continent have fallen so low that they can only bounce? The question remains whole and difficult to decide, especially since nowhere in Europe points to signs of recovery.
Admittedly, on the stock market, the courts of banking titles went back to their higher than ten years, with in particular spectacular progressions in the case of German or Italian banks whose situations were deemed desperate a few years ago. See on this subject Commerzbank: turn the page and unicredit: banker-star, brilliant results.
However, the rebound in valuations offers a more contrasting image. If it is very clear in the two aforementioned examples – Unicredit is currently valued at X1.1 its tangible equity against an average at ten years of X0.5; Commerzbank at X0.9 its tangible equity against an average at ten years of X0.4 – he is however waiting at other mastodons in the sector.
For example, HSBC and Banco Santander, partly preserved from disorders in Europe thanks to their strong presence in Asia for the first, in North and South America for the second, are currently valued at X1.1 their tangible equity against a average at ten years from X0.9; Rather than a rebound, it is therefore a relative stability that characterizes them.
-BNP Paribas is valued at X0.6 its tangible equity, a notch below its average at ten years, while Crédit Agricole is right on its average precisely, at X0.8 its tangible equity. Barclays, for its part, only displayed a very modest progression, to X0.7 its tangible equity against an average at ten years from X0.5.
With the exception of Citigroup, the gap is of course striking with the large American banks. Bank of America is valued at X1.7 its tangible equity; JPMorgan and Wells Fargo at X2.7 and X1.8 The Theirs; Us Bancorp, on the other hand, does not start from the multiple of X2 its tangible equity which has defined its valuation for ten years.
See on this subject Citigroup Inc .: The delicate Fraser equation, Jpmorgan Chase & Co .: Mitigated year, Record valuation, US Bancorp: Signals to watch and Wells Fargo & Company: Providential timing. The upturn is comparable in the segment of investment banks, as we recently mentioned in The Goldman Sachs Group, Inc .: Wall Street and Jefferies Financial Group Inc.: Grand Cru 2024.
Optimistic investors who bet on a catch-up of banking institutions on this side of the Atlantic point the finger at the profitability dynamics. It is true that they tend to significantly improve in Europe, to gradually return to two -digit territories; While they stagnate, even erod a little with their North American peers.
In aggregate, UBS expects European banks to return € 123 billion to their shareholders on behalf of the fiscal year 2024. 40% of this amount will be distributed by, in order, HSBC, BNP, Intest Sanpaolo , Unicredit and ING Groep. At the back of the ranking, the big ones absent from the podium are Crédit Agricole and Deutsche Bank; The two taken together should return less capital to their shareholders than the Spaniard BBVA.
