Risk

Much heavy lifting has already been done to raise European banks’ capital ratios, as a new analysis by S&P Global Market Intelligence shows —data drawn from 30 European banks, both eurozone and non-eurozone, shows that these institutions reported at the end of 2015 fully loaded common equity Tier 1 ratios of at least 10% and most announced leverage ratios of 4.0% or higher.

Market volatility has increased again at the start of the year due to intensified worries over Chinese growth weakness, geopolitical tensions and a further fall of the oil price. Although a lot of bad news is already priced in, we prefer to maintain a cautious positioning.

European bank stocks have collapsed so far this year whilst their credit default swaps have risen rapidly. Surely the credit and equity markets are telling us something? – Europe’s nascent economic recovery is over? Negative rates are killing net interest margins? They don’t have enough capital?…the list goes on. Whilst all the above cannot be ignored and investors need to select bank stocks carefully...

Natixis Global Asset Management (Natixis Global AM) has today published the first annual edition of its Global Portfolio Barometer, offering insights into model portfolios across the world and the asset allocation decisions made throughout 2015.

According to Wouter Sturkenboom, Senior Investment Strategist at Russell Investments, the European financial sector has been selling off very hard this year and there are genuine concerns which underpin the declines...