European bank stocks made a historic leap in the first half of the year: the Stoxx 600 index soared 29%, and many banks recorded record performance

The Zhitong Finance App learned that the European banking industry handed over a report card that attracted the attention of the market in the first half of the year. The Stoxx 600 Index recorded its best half-year performance since 1997 with a 29% increase. This strong trend reflects investors' strong confidence in the European financial sector. Against the backdrop of macroeconomic fluctuations and trade risks, increased trading activity and improved profits have become the core driving forces driving the market.

Société Générale led the way

Société Générale led the European banking industry with a 79% share price increase, and the stock price reached a high in 2017. Under the leadership of CEO Slavomir Krupa, this established French bank has successfully won market recognition through a series of reforms such as divesting non-core businesses, strengthening balance sheets, and improving profit targets and shareholder returns. Santander's analyst team specifically pointed out in the June research report that the bank's cost control results have been remarkable, and the potential for performance to exceed expectations is worth paying attention to.

Commerzbank's assets exceed 30 billion euros

Commerzbank's performance was also impressive. Its market capitalization broke through the 30 billion euro mark for the first time in May, doubling from when Italy's Yushin Bank proposed a merger in September of last year. Although Yushin Bank CEO Andrea Auxerre made it clear in June that due to the sharp rise in German Commercial Bank's stock price, there is no room for value creation, strong profit performance and potential acquisition interest continue to drive up stock prices.

Bank of Spain continues to shine

The Spanish banking sector continued the strong performance of the upward cycle of interest rates. Santander's stock price surged 57% in half a year, successfully surpassing UBS Group to become the largest bank by market capitalization in Europe. The country's banking sector has shown unique resilience during the ECB's interest rate cut cycle, with strong profitability, stable handling fee revenue, and mergers and acquisitions supported the stock price. Although the Spanish Foreign Bank's offer to buy Banco Sabadell was suspended by the government, its expansion ambitions are clearly visible.

Deutsche Bank's boost in Germany

Deutsche Bank (DB.US) returned to the eyes of investors with a 51% increase, and the stock price is approaching 2015 levels. Germany's largest bank has made increasing dividends the core of its strategy, and is also expected to benefit from large-scale fiscal stimulus policies in the country. However, the capital ratio data disclosed by CEO Christian Sewin on Monday still put short-term pressure on stock prices.

Bank of Italy is keen on mergers and acquisitions

The Italian banking sector is setting off a wave of mergers and acquisitions, and the increase in profits brought about by rising interest rates has created conditions for industry consolidation. Yushin Bank ranked among the top banks in Europe with a 48% increase. While it acquired Banco BPM and increased its stake in the Bank of Greece, its market capitalization surpassed that of its established rival Intesa Sanpaolo in May. The stock prices of institutions such as Mediobanca and Banca Generali also hit record highs one after another, indicating the reshaping of the Italian financial industry pattern.

Although the market is still divided on trade risks and economic prospects, KBW analyst Andrew Stimpson believes that substantial improvements in European banking profitability and relatively undervalued valuation levels provide a solid foundation for the sector to continue to strengthen. This cross-border capital feast is reshaping Europe's financial landscape.