Written By The world of finance has been nothing short of volatile over the past year. The pandemic hit hard and fast, causing global economic turmoil. But, as it often does in times of crisis, the financial sector has shown remarkable resilience. Bank shares across Europe have rebounded from their pandemic lows, with UBS leading the way in this upward trend. In this blog post, we’ll explore how UBS and other European banks are bouncing back to pre-pandemic levels and what it means for investors looking to get in on the action.
Big banks lead the way in European markets
The European banking sector has been one of the hardest hit by the pandemic, with shares dropping to record lows. However, there are signs of a recovery, with big banks leading the way.
UBS is one of the largest banks in Europe and has been one of the biggest beneficiaries of the recent rebound in bank shares. The Swiss bank’s share price has surged over 30% since March, when it reached a pandemic low.
Deutsche Bank, another European giant, has also seen its share price rise sharply in recent months. The German bank is up around 20% since its March low.
Other big banks that have seen their shares rise significantly include Credit Suisse, Barclays, and BNP Paribas. These banks have all benefited from the overall rebound in European markets in recent months.
The European banking sector is starting to recover from the pandemic-induced sell-off that saw shares plunge to record lows. Big banks are leading the way, with UBS and Deutsche Bank seeing their share prices surge by over 30% and 20%, respectively, since March. Credit Suisse, Barclays, and BNP Paribas are also among the big winners as European markets rebound.
UBS sees biggest gains of any bank
In the wake of the pandemic, UBS has seen the biggest gains of any bank, bouncing back from lows and outperforming its competitors.
The Swiss lender reported a profit for the first quarter of 2020, thanks in part to heavy cost-cutting measures. But it was also helped by strong performances in its investment banking and wealth management businesses.
UBS’s shares are up around 30% since March, when the pandemic caused a widespread sell-off in financial markets. That puts it well ahead of rivals such as Credit Suisse, which is up around 10%, and Deutsche Bank, which is still down on the year.
Analysts say UBS’s recovery is a sign that the bank is weathering the storm better than its peers. They attribute this to UBS’s focus on wealthy clients, who have been less affected by the economic downturn than other segments of the population.
So far, UBS’s strategy appears to be paying off. The bank posted strong results for the first quarter of 2020, and its shares are up sharply from their pandemic lows. If this trend continues, UBS could emerge as one of the big winners from the crisis.
Other big banks following suit
It’s been a tough year for the banking sector, but there are signs of life. European banks were among the hardest hit by the pandemic, but shares have bounced back from their lows. UBS is leading the way, with shares up almost 50% from their March lows. Other big banks are following suit, with Credit Suisse and Deutsche Bank both up around 30%.
The sector is still facing challenges, but there are reasons to be optimistic. European banks have been quick to raise capital, and they’ve benefited from the ECB’s stimulus measures. With governments across Europe starting to ease lockdown restrictions, there should be more demand for loans and other banking services.
It’s not all good news, though. Non-performing loans are expected to rise as the pandemic hits businesses and households hard. And it remains to be seen how well banks will weather any further economic shocks. But for now, investors are betting that European banks can stage a recovery.
Why are banks doing better now?
Banking shares have been bouncing back in recent weeks as the European economy begins to reopen after months of lockdown due to the Covid-19 pandemic.
One of the main reasons for this is that banks are starting to benefit from the release of pent-up demand for loans and other services that were put on hold during the shutdown. This is particularly true for investment banking and trading activities, which have started to pick up again as businesses and markets adjust to the new normal.
In addition, many banks have been able to take advantage of government support schemes such as the UK’s Coronavirus Business Interruption Loan Scheme (CBILS). This has helped them to weather the storm and emerge in a stronger position than before.
Overall, banks are doing better now because they are seeing an increase in business activity and are benefiting from government support. This is likely to continue in the coming months as economies slowly recover from the pandemic.
What does this mean for the future?
The past year has been tough for the banking sector, with European bank shares taking a beating from pandemic-related economic uncertainty. However, there are signs of life in the sector, with shares bouncing back from lows seen earlier in the year. This is good news for the European economy as a whole, as banks play a vital role in providing financing and driving growth.
Looking ahead, it is hoped that the worst is behind us and that the banking sector can return to some semblance of normality. This will be crucial for supporting the recovery of the European economy, which is still very much in flux at present. With this in mind, UBS’s strong performance is a positive sign for things to come.
Conclusion
UBS has demonstrated that European bank shares can return to pre-pandemic levels with the right strategies in place. With an increased focus on digital banking, investment in technology and proactive engagement with regulators, UBS has been able to enhance its competitive edge while also protecting itself from potential losses. As other banks around Europe look to follow suit, it is likely that we will continue to see more positive developments in this sector as time goes on.
