LIVE MARKETS-Whither European bank stocks?

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WHITHER EUROPEAN BANK STOCKS?

It's been a busy couple of weeks for European bank earnings, and UBS in a Friday note, say it's been a good one.

Of the 24 European banks they track, the average pre-tax profit beat was just over 5% and the average pre provision profit beat was 3.6%.

As well, 80% of banks beat on both measures, with better revenues and better cost control both in the mix.

They say they remain positive on the asset class and expect consensus earnings per share to rise by 2-3%.

Markets generally seem to agree. The European banking index is up around 3.4% .SX7P since Oct 20, while the broad STOXX 600 is up around 0.5%. .STOXX

Year to date, the banking index is up a stonking 48% compared to around 13% for the STOXX 600.

Not everyone agrees with the optimism.

BofA analysts, long-term bears on European stocks, also have a note out Friday saying they see 10% relative downside for banks in the coming months.

Their argument is bank stocks have overshot their relationship with yields, and also aren't reflecting the risk they see of a rise in credit spreads.

It's good to have a market in views, let's see what happens.

(Alun John)

EARLIER ON LIVE/ MARKETS:

STERLING CREDIT LOOKING CHEAP AHEAD OF THE UK BUDGET CLICK HERE

EUROPEAN SHARES SET FOR WEEKLY LOSS CLICK HERE

BEFORE THE BELL: FUTURES STEADY BUT ANOTHER MONTH OF GAINS CLICK HERE

NO TRICKS, SOME TREATS FOR MARKETS CLICK HERE