Photo: Pixabay/QuinceCreative
According to the report by the Swiss bank UBS, in two years the net interest of European banks increased by more than 100 billion euros. If in 2021 European banks earned a total of 270 billion euros in net interest, this year the banks’ net interest has already reached 378 billion euros. Thus, in just two years, banks’ interest income increased by more than 100 billion euros, reports the ERR Financial Times news.
At the same time, the number of loans granted increased by only 2%, which means that the interest income of banks increased due to higher interest rates on loans already granted, while the interest paid to customers on deposits is not increased just as rapidly.
Rising interest income has allowed European banks to pay more dividends to owners and increase the volume of share buybacks. If in 2021 banks spent 90 billion euros on these two activities, in 2023 banks have already spent 121 billion euros to pay dividends and buy back their shares.
At the same time, bank stocks have not grown as fast as their earnings, and the ratio of the market value of European bank stocks to their balance sheet value is significantly lower than that of US banks.
2023-12-29 14:04:39
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