European Banking Stocks Slide On Falling Profit

By Staff of Admiral Markets

Access To Financial Markets Made Easy • Jul 29, 2020 at 7:11 AM EDT

Two European banking heavyweights have posted falling profits relate to coronavirus-related loan losses, marking a gloomy period ahead for the banking sector.

Two European banking heavyweights have posted falling profits relate to coronavirus-related loan losses, marking a gloomy period ahead for the banking sector.

European banks slide

In its latest earnings report Barclays (BCS) posted net income of just £695 million for the first six months of the year. This is after reporting a 42% fall in profit in the last earnings report with a £1.6 billion credit impairment charge for dealing with loans and mortgages turning bad due to the coronavirus pandemic.

While income rose 8% compared to last year - mostly due to higher trading profits from the recent market volatility - the bank's pre-tax profit more than halved from £3.1 billion last year to £1.3 billion.

Banking giant Deutsche Bank (DB) also posted a second-quarter net loss in its latest earnings report, largely due to allocating credit loss provisions in the amount of €761 million. While the second-quarter loss amounted to €77 million, it is much less than last year's loss for the same period of €3.2 billion.

The bank now anticipates that its full-year revenue will most likely be flat but does offer a more optimistic forward guidance than analyst expectations and the bank's own previous forecasts.

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