European Bank Shares Tumble After U.S. Banks Lose Billion Dollars in Value

By Ed Frankl

Shares in European banks dived on Friday, tracking U.S. banking stocks overnight that fell on market jitters after tech-focused lender SVB Financial Group said it lost $2 billion selling assets following a slump in deposits.

The Stoxx Europe 600 Banks index, which tracks the continent's largest lenders, was down 4.1% at 0920 GMT.

Among Europe's larger banks, HSBC Holding PLC shares in London are down 5.5%, Lloyds Banking Group falls 3.1%, Deutsche Bank AG dives 7.9%; BNP Paribas SA slumps 3.9%; ING Groep NV sinks 5.3%; Intesa Sanpaolo SpA drops 3.1%; Banco Santander SA dips 5.2%; and UBS Group AG tumbles 4.5%.

The fall in the sector's stocks wipes out some of the gains in market value that banks have made since the start of the year, driven by a strong set of earnings on the back of rising interest rates that fed into income from loans.

However, since the start of the year, the index is still up 13%, according to FactSet data.

More than $50 billion was wiped out Thursday from the top four U.S. lenders--JPMorgan, Bank of America, Wells Fargo and Citigroup--spooked by contagion fears after SVB's decision to sell a large chunk of its securities portfolio at a loss.

While the sharp rise in interest rates and bond yields over the past year was expected to expose some issues in financial services, SVB's issues don't constitute a Lehman moment for the industry, according to analyst Gary Greenwood of Shore Capital.

Write to Ed Frankl at [e-mail]

(END) Dow Jones Newswires

March 10, 2023 05:00 ET (10:00 GMT)

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