80% of European banks beat expectations in pre-tax profit, +35% year-on-year and +4% quarter-on-quarter

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Morgan Stanley: This has been another quarter in which banks have once again posted excellent results. 80% of banks beat in terms of PBT, up +35% year-on-year and +4% quarter-on-quarter, with capital beat also 830bps better, and no signs of deterioration in asset quality (provisions were -26% below our expectations and cost of risk remains conservative at around 55bps in 2023. The management teams highlighted that in deposits the mix will be changing and deposit beta will be increasing in line with our analysts’ estimates to 30% by year-end. The peak in NIMs is expected to be reached in 2H’23. Our analysts’ favourites are Caixabank, Intesa, ING and Commerzbank and reiterate Underweight on Credit Agricole.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.