{"id":22789,"date":"2025-07-11T14:15:10","date_gmt":"2025-07-11T13:15:10","guid":{"rendered":"https:\/\/latribune.lazardfreresgestion.fr\/?p=22789"},"modified":"2025-07-11T14:28:24","modified_gmt":"2025-07-11T13:28:24","slug":"a-banking-sector-still-undervalued","status":"publish","type":"post","link":"https:\/\/latribune.lazardfreresgestion.fr\/en\/a-banking-sector-still-undervalued\/","title":{"rendered":"A banking sector still undervalued"},"content":{"rendered":"

Chart of the Week<\/h2>\n

The banking sector has experienced significant growth in the stock market, with the Euro Stoxx Banks index up 39.46% YTD as of July 3, excluding the effect of reinvested dividends.<\/p>\n

Despite this impressive performance, the sector’s valuation metrics remain very moderate. For example, the Price-to-Book ratio, which measures a company’s market value relative to its book value, is only slightly above 1 for banks within the Euro Stoxx Banks index. This ratio has not mirrored the sharp recovery in European banks\u2019 profitability since 2015, even though the two indicators previously displayed a strong relationship.<\/p>\n

\"\"<\/p>\n

OUR <\/b>ANALYSIS<\/b><\/h3>\n

Over the past decade, the market has been extremely cautious toward the banking sector, even though banks have returned to solid profitability. However, Eurozone banks now have a much lower risk profile than in the past, thanks to more conservative management of balance sheet liquidity, strong capital buffers, and healthy balance sheets with historically low levels of non-performing loans. The long period of regulatory tightening and negative interest rates, which had a significant impact on bank profitability, is now behind us. This unlocks cash flow potential and paves the way for consolidation opportunities.<\/p>\n

While the banking sector has begun to win back investor confidence, we believe it still has significant long-term catch-up potential.<\/p>\n

***<\/p>\n

Written on July 4 2025. Opinions subject to change.<\/p>\n

See also: US Employment: Could Household Concerns Signal a Downturn?<\/a><\/p>\n

This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Fr\u00e8res Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Fr\u00e8res Gestion SAS. LAZARD FRERES GESTION \u2013 a simplified joint stock company with share capital of \u20ac14,487,500 \u2013 Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES \u2013 75008 PARIS, FRANCE<\/p>\n","protected":false},"excerpt":{"rendered":"

Chart of the Week The banking sector has experienced significant growth in the stock market, with the Euro Stoxx Banks… <\/p>\n","protected":false},"author":101016,"featured_media":22792,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[148],"tags":[2692],"class_list":["post-22789","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-chart-of-the-week","tag-european-banking"],"yoast_head":"\nA banking sector still undervalued<\/title>\n<meta name=\"description\" content=\"The banking sector has experienced significant growth in the stock market, with the Euro Stoxx Banks index up 39.46% YTD as of July 3, excluding the effect of reinvested dividen\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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