Barclays: Banking on the banks

Konjunktur

(Foto: Minerva Studio - Fotolia.com)

London – Once again, the Banks are the centre of attention. Although the Continental European  market has generated a total return of 7.8% year-to-date, with the Banks posting a 10.8% gain, recent disappointing economic data, especially the 0.2% gain for Q1 Euro Area GDP,  has put the Banks, and their lack of lending, squarely in the spotlight as the most likely  roadblock to a fully fledged economic recovery in the Euro Zone.

The Banks’ central role is  reflected in the sectors’ increased beta. In the last 30 days it stands at 1.8,  compared with a post 2008 average of 1.42, while the recent relative performance picture  shows a largely earnings related underperformance from early April to mid-May, the  recovery in the past couple of weeks has only brought the relative performance of the  sector back to where it was at the time of the ECB’s last meeting on May 8th.

Read here the full research report «Banking on the banks»…

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