LIVE MARKETS-BofA sees bright 2026 for bank credit
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BOFA SEES BRIGHT 2026 FOR BANK CREDIT
Bank credit could outperform next year as 2025's swathe of rate cuts provides a positive backdrop, according to Bank of America Global Research.
The Bank of England lowered borrowing costs on Thursday, perhaps the last big global rate cut this 2025. BofA notes that this year is close to matching the COVID year of 2020 for net rate cuts globally, a remarkable fact given the economy has avoided a recession.
"Cuts have meant steeper yield curves − great news for the performance of global bank equities," BofA notes.
"Our banks credit team see this as a good omen for the performance of bank credit in 2026."
European banks have shone this year. The STOXX Europe 600 banks index .SX7P is up 65% and the best-performing sector in Europe by a distance.
"With bank fundamentals incredibly strong, we feel bank spreads are primed to outperform non-financial spreads again in 2026," BofA adds.
(Samuel Indyk)
EARLIER ON LIVE MARKETS:
EUROPEAN SHARES SUBDUED, SET FOR WEEKLY GAIN CLICK HERE
EUROPE BEFORE THE BELL: FUTURES DIP, BOJ HIKES, NIKE SINKS CLICK HERE
JAPAN'S SAVERS GET TO PARTY LIKE IT'S 1999 CLICK HERE
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