European banking stocks slide on falling profit

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<a href="https://admiralmarkets.com/analytics/traders-blog/european-banking-stocks"><img data-resize="auto" data-resize="auto" data-resize="auto" style="width:auto;" data-src="https://fxmedia.s3.amazonaws.com/articles/remote/8cc929bc15357964803358a2f8504938.jpeg" rel="" alt="European banks slide"></a>
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Two European banking heavyweights have posted falling profits relate to coronavirus-related loan losses, marking a gloomy period ahead for the banking sector.
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In its latest earnings report Barclays posted net income of just £695 million for the first six months of the year. This is after reporting a 42% fall in profit in the last earnings report with a £1.6 billion credit impairment charge for dealing with loans and mortgages turning bad due to the coronavirus pandemic.
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While income rose 8% compared to last year – mostly due to higher trading profits from the recent market volatility – the bank's pre-tax profit more than halved from £3.1 billion last year to £1.3 billion.
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Banking giant Deutsche Bank also posted a second-quarter net loss in its latest earnings report, largely due to allocating credit loss provisions in the amount of €761 million. While the second-quarter loss amounted to €77 million, it is much less than last year's loss for the same period of €3.2 billion.
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The bank now anticipates that its full-year revenue will most likely be flat but does offer a more optimistic forward guidance than analyst expectations and the bank's own previous forecasts.
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<img data-resize="auto" src="https://fxmedia.s3.amazonaws.com/articles/remote/52ae768c1d81fa993254b3887856b3ed.png" rel="" alt="Barclays monthly strategy chart" />
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<em>Source: Admiral Markets MetaTrader 5 Web, #BARC, Monthly – Data range: 1 July 2006 to 28 July 2020. Please note: Past performance is not a reliable indicator of future results. </em>
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