Banks earnings roundup: Lloyds Bank, Deutsche Bank and Credit Suisse
Lloyds Banking Group has generally pleased investors while EU pressures have been highlighted by Deutsche Bank as it warned about an incoming drop in investment banking profits. Credit Suisse has issues all of its own.
(Video Transcript)
European banks outlook
European banks were in the crosshairs today. Traders on the IG platform have been watching for any signs that a weaker economy, higher interest rates and the war in Ukraine are weighing on any of their operations.
One of the best performers has been Lloyds Banking Group PLC here in the U.K. It's domestically orientated, so pretty much insulated from what is happening further east across Europe. But despite setting aside £377 million to cover a possible bad debt pile, it said pre-tax profits came in at £3.7 billion at the first half, better than forecast, but down from last year's £3.9 billion.
Lloyds share price
Let's take a look at what's happened to the share price, because it has been one of the best performers in the European market. It's currently up 3.8%, we're off the highs. But interestingly enough, we have risen past this prior line of resistance which was established as a line of support back in December last year at 44.3 pence, currently trading at 45.23.
I was talking about this in the Early Morning Call this morning about going along with a stop-loss below the 40. And that so far is making money.
Deutsche Bank
Meanwhile Deutsche Bank AG - ADR also posted a better-than-expected earnings number a 51% rise in second quarter profit as investment banking revenues rose, though the lender was less optimistic about the division's prospects for the full-year and warned about the economic outlook.
German banks are feeling the heat of the geopolitical environment more than others across the EU because of the historical ties Germany has had with Russia. Also the country particularly is dependent on Russian energy and so its economy will be hit hard by any supply shortages.
A quick update on its trading pattern that we've seen so far today. On the IG platform. Deutsche Bank is currently losing 3.2% on its way down to this line of support at 752, currently down at 789.
Credit Suisse
Finally, Credit Suisse, the Swiss banking giant, has all sorts of problems.
It posted a mammoth second quarter loss on this 1.6 billion CHF. And the immediate resignation of the chief executive, Thomas Gottstein, who will be replaced by asset management CEO, Ulrich Körner, but the outlook is very unclear with the bank still facing higher litigation provisions.
One positive is that the company has confirmed that there are no plans to merge with another bank - that was taken positively in the market this morning. Speculation had been in the markets that the US bank State Street may be lining up an offer for the business.
Let's take a look at what's happening with Credit Suisse, which in the session today is only up by a margin of 0.6%, but I think the fact it has risen is interesting, bearing in mind the recent declines, you see not too far away from a line of support at 498. The stock is currently trading at 520 on the Swiss markets.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
