European banks slide on recession worries after sweeping US tariffs

Shares in European banks fall on Thursday after U.S. President Donald Trump unveiled new tariffs, stoking worries about global recession

The STOXX 600 banks index .SX7P is down 3.9% to its lowest since February 25, the worst performer on the wider STOXX 600 .STOXX index

*The banking index was up 23% YTD until Wednesday's close

(...) if recession fears increase and rates expectations get repriced lower, we believe that the sector may see some profit taking given high positioning on the space," Barclays says

Johann Scholtz from Morningstar adds the new tariffs will significantly impact European exporters, which could in turn lead to an increase in defaults on mortgages and personal loans

"We would expect European banks to set aside higher loan loss provisions," Scholtz says

Germany's Commerzbank CBKG.DE and Deutsche Bank DBKGn.DE drop between 3.3% and 4.7%; Italy's BPER Banca EMII.MI, UniCredit CDRI.MI are down around 4%

Asia-exposed banks such as HSBC HSBA.L, Standard Chartered STAN.L, slip 5.6% and 8.7%, respectively

France's Credit Agricole CAGR.PA, Societe Generale SOGN.PA, BNP Paribas BNPP.PA slip between 2.5%-4%%

Spain's Sabadell SABE.MC, CaixaBank CABK.MC, Santander SAN.MC, Bankinter BKT.MC, are down between 1.7% and 3.4%