BUZZ-BofA sees 2025 as "now or never" moment for European banks to narrow gap vs US

** This year is "now or never" for European banks to engage in M&A, with possible ROI estimated at 15-18%, as they need to narrow the gap vs U.S. peers, BofA Global Research says

** It sees European banks' valuation discount at 10-year highs vs U.S. peers, and they trade at 7x P/E ratio expected in 2025, roughly half of the 14x projected for U.S. lenders

** Europe needs stronger and more profitable banks, but politics risk highlighting Europe's limitations, like with BBVA BBVA.MC/Sabadell SABE.MC and UniCredit CRDI.MI/Banco BPM BAMI.MI deals, it says

** The lenders come under scrutiny also as their profitability will go through a "key test" of a restored "normal" rate cycle, says BofA

** BofA however expects a pick-up in capital markets activity to support "non-NII momentum"

** Its top picks for this year include Barclays BARC.L, BBVA, Commerzbank CBKG.DE, Societe Generale SOGN.PA, and UniCredit

(Reporting by Mateusz Rabiega)

((Mateusz.rabiega@thomsonreuters.com;))