1145 GMT - Morgan Stanley raises its view on European banks to attractive from in-line in an update to its risk-reward summaries for the continent's lenders. "We gain conviction that yield steepening will hold and [net interest income] growth will resume in 2026," analysts write, noting that the de-escalation of U.S. and China tensions mean the risks to European growth have receded. Healthy deposit growth from European banks' high savings rate will be better monetized in the future, they estimate. They calculate that earnings per share will grow around 10% in 2026 and 2027 on average, and this isn't priced into current valuations. They upgrade ABN Amro, AIB Group and Bank of Ireland to equalweight from underweight and recently cut Julius Baer and Mediobanca's ratings due to uncertainty on fee income. (elena.vardon@wsj.com)
(END) Dow Jones Newswires
May 21, 2025 07:45 ET (11:45 GMT)
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