By Joe Wallace

European bank stocks dropped Friday, paring some of the stellar gains they have posted for much of 2025.

Investors are fretting about loan quality after a spate of problems in American credit markets. The banks down the most-Barclays, Deutsche Bank, Société Générale-are those with exposure to the U.S.

"The Spidey-senses of the market are being a little bit sensitive to a few losses," said Nick Brind of Polar Capital Partners, which invests in financial companies.

After this year's run-up, the stocks are a candidate for investors who are getting nervous about the economy to sell. Friday's failure of BBVA's long-running attempt to take over Banco de Sabadell may also have dented confidence in the ability of other European banks to pull off big deals.

For shares of U.K. banks, mounting expectations the Bank of England will cut interest rates by early next year aren't helping either.

Several European banks are due to report earnings over the next two weeks.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

October 17, 2025 10:00 ET (14:00 GMT)

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