Catenaa, Tuesday, July 01, 2025- European bank stocks had their strongest first-half since 1997, as the Stoxx 600 Banks Index rose by 29% by the end of June.
The index was the top-performing subgroup in Europe, as investors piled into lenders for their strong returns and resilient earnings. An increase in deal-making added more fuel to the fire, particularly in Italy.
Among the main highlights of a stellar first half, Banco Santander SA’s advance pushed it past UBS Group AG to become continental Europe’s most valuable lender, while Commerzbank AG’s value appreciated so much that UniCredit SpA doesn’t see it as an attractive deal target.
Societe Generale SA has surged 79% since the start of the year and is trading near its 2017 high as Chief Executive Officer Slawomir Krupa’s turnaround plan for the French bank gains traction.
Also among top-performing bank stocks this year is German lender Commerzbank, whose market capitalization surpassed $35.3 billion for the first time in May. Its multi-year rally has been fueled by earnings strength and takeover interest.
Spanish lenders, which had rallied on the back of higher interest rates, have sustained gains through the European Central Bank’s cutting cycle on robust earnings, fee-generating businesses and M&A deals.
Banco Santander, which has jumped 57% since the start of the year, has surpassed UBS as the biggest bank in continental Europe by market value. Elsewhere, BBVA SA plans to stick with its bid for smaller peer Banco Sabadell SA, after the Spanish government delayed a potential merger.
Deutsche Bank AG shares have climbed 51% so far this year and are trading around 2015 levels, as the German lender has boosted payouts to shareholders and is set to benefit from the impact of massive government fiscal stimulus in its home country.
UniCredit is among Europe’s best performers this year, up 48% as it pursues Italian peer Banco BPM SpA while doubling its stake in a Greek lender.
Its market capitalization exceeded that of rival Intesa Sanpaolo SpA in May to make it Italy’s largest bank by that metric. Peers Mediobanca SpA and Banca Generali SpA have recently hit fresh record highs.
