European banking is on track to achieve its best month of the year on the stock market. The financial sector of the Stoxx 600 rose 5% in September, driven by the ECB’s decision to raise rates by 75 basis points to put a stop to escalating inflation, even if it took the euro zone economy ahead. A rate hike that gives a break to some very battered margins of financial institutions in recent years and that is being reflected in the evolution of these entities on the stock market. If it stays like this, the banking sector will close its best month of the year since January.
Among the financial entities that benefited the most from this rally, Commerzbank stood out, up 20.8% so far this month, followed by Bank of Ireland, with a rise of 18.9%. Just behind comes the first Spanish: CaixaBank stands out 17.1% in September. Behind him are Bankinter, with an increase of 15.3%, and in the distance Sabadell with 10.2% and BBVA with another 9.8%. Santander, on the other hand, is the financial firm that is making the least profit from this rally, advancing a minimum 6.8% in the month.
The vice president of the ECB, Luis de Guindos, acknowledged yesterday that the data underpins a “substantial” slowdown in the euro zone economy and that the risks for inflation to remain high remain high. “Monetary policy has to walk a fine line on interest rates, although its magnitude will depend on economic data,” he noted.