LIVE MARKETS-Fees power bank beats

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FEES POWER BANK BEATS

Banks have once again topped investor expectations this season, largely weathering the caution over tariff uncertainty. That has helped the sector .SX7P cement itself as the best performer, up over 28% this year.

In his earnings recap, Keefe Bruyette & Woods' Head of European Banks Research, Andrew Stimpson, highlights how fees have been key in driving the solid reporting, as bets grow that falling interest rates will start to erode margins.

"(Net interest income) is in line with forecasts in aggregate whereas total revenues beat by +3% driven by strength in fees and strong trading income this quarter. NII is -1% weaker than last year with interest rates and margins driving most of the decline," he writes.

KBW adds costs were in line, gross operating profits were 6% above consensus, capital a little better, while provisions were slightly lower than expected and coverage levels rose.

Stimpson also notes that some banks made deliberate moves to build some extra reserves due to tariff risks, though that had a muted impact on Q1.

(Danilo Masoni)

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