Key facts
- Standard Chartered reported a 9% rise in first-half pretax profit to $4.78 billion.
- The bank lifted its full-year income growth target to the 5-7% range.
- Deutsche Bank reported a 10% jump in second-quarter profit.
- UBS reported a 17% jump in second-quarter profit.
- European banks' STOXX Europe Banks index is up 143% since early 2024.
Standard Chartered reported a 9% rise in first-half pretax profit to $4.78 billion, surpassing analyst estimates. The bank lifted its full-year income growth target to the 5-7% range, driven by a 38% surge in wealth management income and strong performance in global banking.
European banks, including Deutsche Bank and UBS, also reported better-than-expected second-quarter earnings, buoyed by increased trading activity and strong retail businesses. Deutsche Bank's profit jumped 10%, while UBS saw a 17% increase. This performance extends a recovery for European lenders, with the STOXX Europe Banks index reaching its highest level since 2007.
Despite the rally, European banks trade at a fraction of their U.S. counterparts based on price-to-book value. Analysts note that subdued economic growth in the Eurozone and regulatory constraints remain concerns, though higher interest rates are boosting net interest income. Some analysts believe that improving returns on equity are not yet fully reflected in current valuations.