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The
STOXX index has fallen 5.8% this week, as Friday's 2.1% drop
built on Thursday's 4.5% decline. That would be its biggest
weekly drop since March 2023, when the sector was rocked by the
collapse of Credit Suisse and concerns over the stability of
U.S. regional banks.
Global central banks are starting to cut interest rates - the
Bank of England cut on Thursday and the Federal Reserve is
gearing up for a cut next month - which tends to erode lenders'
profitability.
Societe Generale has been central to the move. On Thursday it
cut its guidance for its French retail net interest income,
sending its shares down 8% and weighing on the broader sector.
They were down a further 4.7% on Friday at their lowest since
October.
Swiss bank UBS, which is not in the banking index, saw its
shares fall 6.5% on Friday, catching up with the move after
Swiss markets were closed for a holiday on Thursday.
The move in banks is part of a broad sell off in equity markets
with other sectors including tech getting hard hit. Data showing
global growth is slowing and central bank rate cuts gathering
pace are not helping lenders either.
Europe's banks have lost almost $100 billion in market value in
the space of just a week, according to LSEG data.
(Reporting by Alun John; Editing by Amanda Cooper)
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