European banking stocks slide on falling profit

July 29, 2020 11:30

Two European banking heavyweights have posted falling profits relate to coronavirus-related loan losses, marking a gloomy period ahead for the banking sector.

In its latest earnings report Barclays posted net income of just £695 million for the first six months of the year. This is after reporting a 42% fall in profit in the last earnings report with a £1.6 billion credit impairment charge for dealing with loans and mortgages turning bad due to the coronavirus pandemic.

While income rose 8% compared to last year - mostly due to higher trading profits from the recent market volatility - the bank's pre-tax profit more than halved from £3.1 billion last year to £1.3 billion.

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Banking giant Deutsche Bank also posted a second-quarter net loss in its latest earnings report, largely due to allocating credit loss provisions in the amount of €761 million. While the second-quarter loss amounted to €77 million, it is much less than last year's loss for the same period of €3.2 billion.

The bank now anticipates that its full-year revenue will most likely be flat but does offer a more optimistic forward guidance than analyst expectations and the bank's own previous forecasts.

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If you are feeling bullish or bearish on banking stocks you can speculate on its price direction using CFDs. To get started, follow these five simple steps:

  1. Log in to your existing Admiral Markets trading account, or open a live or demo trading account in just a few minutes.
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Source: Admiral Markets MetaTrader 5 Web, #BARC, Monthly - Data range: 1 July 2006 to 28 July 2020. Please note: Past performance is not a reliable indicator of future results.

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