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2025-10-29 20:33:48
[Bank Stocks and Credit Risk Severely Diverge! Hidden Dangers Lurk Behind Market Optimism] ⑴ Valuations of major European and American banks do not reflect signs of credit pressure, contrasting sharply with the increasing number of struggling companies. ⑵ The five largest US banks are trading at an average of 2.2 times forward tangible book value, 58% higher than the 10-year average. ⑶ The six largest European banks are also trading at a 43% premium to their 10-year average, indicating widespread investor optimism. ⑷ Third-quarter earnings reports provide some support: UBS's CFO stated they are not worried about the overall environment. ⑸ Santander and Deutsche Bank both have lower loan loss provisions than the same period last year. ⑹ However, details reveal potential risks: BNP Paribas has set aside €190 million in bad debt provisions for its global markets business. ⑺ Deutsche Bank's investment banking loan loss provisions reached €308 million, more than double last year. ⑻ Slowly rising unemployment rates in the US, UK, and Germany typically push up mortgage and credit card losses.
