Bank / Credit Union

European banks set for better earnings season

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October 19, 2020

European banks are gearing up to report third-quarter earnings and analysts are expecting reductions in loan loss provisions to drive stabilization.

The banks are expected to post aggregate earnings growth of -46.5% on an annual basis, compared to -38.8% for the overall financial sector, according to a report in CNBC.

Barclays, HSBC, Lloyds, NatWest and Standard Chartered wrote down their loan books by £7.5 billion ($9.7 billion) in the first quarter and £10.6 billion in the second.

"Within the banks sub-industry group, Lloyds Bank, HSBC, Barclays, Unicredit, Intesta Sanpaolo and ING Group have the largest impact towards the aggregate growth rate," Refinitiv Senior Research Analyst Tajinder Dhillon told the news outlet in report.

Deutsche Bank posted a 67.7% growth in third-quarter earnings and reported a net loss of $832 million euros ($924 million) for the same time last year due to its a mass restructuring.

Barclays, which reports on Friday, is expected to report a contraction in annual third-quarter earnings of 79.8%.