European Banks 2026
Higher profitability looks like it is here to stay
European banks have emerged from a decade of negative and ultra-low interest rates with stronger profitability, improved efficiency, and a more resilient funding structure. Our latest industry landscape report explores why the sector's earnings potential appears structurally higher than in the past, despite expectations for lower rates and a normalization of credit losses.
Drawing on Morningstar Equity Research analysis, the report examines the key drivers shaping European banks, from net interest margins and economic moats to regulation, competition, ESG considerations, and long-term growth prospects. Investors will gain insight into how balance sheet dynamics, digitalization, and evolving market structures could influence returns across the sector.
Explore the European Banks landscape. Download the full report now.
What’s inside:
- Why we estimate a 15% midcycle return on equity for European banks
The competitive advantages driving economic moats
Key risks and opportunities across credit, regulation, ESG, and growth