canada goose deals Painful 2013 leaves European banks’ returns well below target canada goose deals

Canada Goose online LONDON (Reuters) Europe largest banks canada goose uk outlet are generating a poor return on their capital, well below their post crisis targets, as muted credit growth slows their recovery and progress on costs is swallowed by unexpectedly high loan losses. Canada Goose online

canada goose coats on sale A sign for Bank Street and high rise offices are uk canada goose outlet pictured in the financial district canada goose Canary Wharf in London in this October 21, 2010 file photo. REUTERS/Luke Macgregor/Files canada goose coats on sale

cheap Canada Goose The data Canada Goose online shows that in 2013 the top 30 listed banks improved their cost/income cheap canada goose uk ratios, an efficiency yardstick, despite billions in fines and canada goose coats on sale provisions for a string of scandals, but with return Canada Goose Outlet on equity (ROE) so weak, canada goose coats investors could take some convincing that their risk profile is low enough to compensate. cheap Canada Goose

canada cheap canada goose goose clearance Two thirds of the banks have set medium term numerical ROE targets, all aiming for at least 10 percent, most Canada Goose sale for 12 percent or more, and some for 15 percent or teens canada goose clearance

canada goose coats While they typically are giving themselves until 2016 to hit their goals, progress is slow. They achieved just 6.6 percent in 2013, according to Reuters calculations of a simple average for cheap Canada Goose the 26 that disclose the figures. For 2012 it was 3.9 percent. subprime mortgage canada goose store market turned the banking world upside down. canada goose coats

Permanently higher levels of capital, imposed uk canada goose by regulators after many banks were laid low by the financial crisis, mean ROE is unlikely to hit those levels again, since higher equity dilutes the return, but investors want to see more progress.

Canada Goose Jackets remains way too low, considering how undercapitalized many European banks remain, said Charles de Vaulx, chief investment officer at New York based International Value Advisors, which has about $18 Canada Goose Parka billion under management. Canada Goose Jackets

buy canada goose jacket cheap Ian Scott, head of European equity strategy at Barclays, who nevertheless counts himself a buyer of banks for their potential for improvement, said canadian goose jacket the stock market as a whole managed an canada goose uk black friday ROE two and a half times higher than the banking sector. buy canada goose jacket cheap

canada goose clearance sale If EU wide stress tests later this canada goose factory sale year conclude that banks need yet more capital to deal with future crises, ROE will fall lower still. canada goose clearance sale

Canada Goose Outlet De Vaulx thinks Canada Goose Online that will make some of the targets too ambitious. Canada Goose Outlet

buy canada goose jacket the medium term, 10 to 12 percent seems a lot more realistic than mid teens, in our opinion, he said. buy canada goose jacket

ECONOMIC RECOVERY Mark Denham, a London based European equities fund manager at Aviva Global Investors, said share prices for banks had already had a good run, boosted by the anticipation of economic recovery, and he couldn see an obvious driver for continued outperformance.

canada goose black friday sale either think a decent improvement in return on equity has been factored in now, at these prices, or even if that isn the case, stocks have performed so well, I would be reluctant to add to them here, he said. canada goose black friday sale

Canada Goose Parka Some are more positive. would be a buyer of banks, said Barclays Scott. and the consensus expect canada goose black friday sale the return on equity of the banking sector will recover and that the gap between the banking sector return and that of the rest of the market should narrow over the next few years as we see loan loss provisions come down, probably quite sharply, and we should also start to see some buy canada goose jacket cheap improvements in loan growth. Canada Goose Parka

Kian Abouhossein, head of European banks research at JP Morgan, canada goose clearance said last year canada goose uk shop returns were depressed by unexpectedly high charges for scandals such as interest rate fixing and mis selling, and because euro zone banks wrote down loans ahead of an ECB test that will determine Canada Goose Jackets whether their assets are properly valued.

Canada Goose sale He expects ROE to rebound at retail and southern European banks this year, but still short of target, given the limited scope for granting new loans in those economies and continuing high loan losses. Canada Goose sale

canadian goose jacket domestic business in Spain, return on equity is not going to be at 10 percent, he said. Italy, it will be below 10 percent (in 2014) and 10 to 12 percent in a normalized environment. For Portuguese banks, you looking at close to break even (for 2014). canadian goose jacket

canada goose Last year, their cost/income ratio was Canada Goose Coats On Sale 60.9 percent, against 62.7 percent for 2012, indicating some progress is being made. A banking source pointed out that most banks ROE targets were based on their continuing or core businesses, whereas current ROE was being dragged down by the run off of troubled loans and discontinued business areas. canada goose

canada goose store question is the quality of return on equity, said Abouhossein. we going to get less and less volatility and standard deviation in the return buy canada goose jacket on equity?. Will it be between plus 15 and minus 15 percent, or between 17 and 10 percent? It will be an interesting discussion point, but we probably won get to a conclusion until we canada goose clearance sale have the next crisis. canada goose store

Reporting By Laura Noonan; Additional reporting by Joshua Franklin and Simon Jessop in London; Editing by Will Waterman.