European banks see Q4 profit surge, ’25 outlook wobbles

European banks are set to post strong fourth-quarter 2024 profits, fuelled by robust lending margins and investment banking revenues. However, analysts warn that falling interest rates may dampen future growth, with forecasts for 2025 becoming harder to achieve.

Banks like Deutsche Bank and BBVA are expected to highlight regional trends, with BBVA’s growth in Türkiye and South America offsetting weaker results in Spain and Mexico. Meanwhile, Deutsche Bank is projected to report a sharp profit decline due to legal and restructuring costs.

Mergers and acquisitions are also in focus, with Monte dei Paschi’s surprise bid for Mediobanca signalling renewed consolidation ambitions in Europe. Despite elevated dividends and share buybacks, analysts predict US banks could pull ahead, benefiting from deregulation and a more favourable economic backdrop.

Major players like BNP Paribas, Societe Generale, UBS, Barclays, and HSBC are set to release their earnings in the coming weeks, shedding more light on how European banks navigate rising pressures in 2025.

Attribution: Reuters

Subediting: Y.Yasser