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Webinar Axiom Alternative Investments - Discussing the European banks' earnings season

Here are the key takeaways from the first quarter 2023 earnings season of European banks.

9th consecutive quarterly result

  • with European banks beating analysts' consensus. 
  • 95% of banks delivered net results in line with or above consensus.

Strong growth in results compared to 2022

  • Q1 23 vs. Q1 22: interest income up 35% 
  • 2023 vs. 2022: expected interest income growth of 20%; net income up 24%.

Results driven by a range of positive factors

  • Better than expected interest income 
  • Commissions more resilient than expected
  • No disappointment on costs 
  • No sign of asset quality deterioration: cost of risk down to 41bps, below 2023 expectations (55bps)
  • Lower loan growth results in higher CET1 ratios (+20bps) 
  • Deposit bases ranged from -5% to +10% over the quarter with a median of -1%

Valuation

  • Valuations that contrast with the sector's good performance