Five largest European banks lost nearly half of market cap

The coronacrisis has hit the European banking system hard

European banks

Five largest European banks lost nearly half of market cap. Source: shutterstock.com

StockApps has found that the market capitalization of Europe’s 5 largest banks dropped to $233.1 billion in August, which is a 42% plunge since the beginning of 2020.

In fact, HSBC, Europe’s largest bank by assets,  reported a 65% drop in pre-tax profits for the H1 2020 to $4.3 billion, down from $12.41 billion in 2019. The revenue dropped by 9% to $26.7 billion during the same period.

As of December 2019, its market capitalization stood at $161.5 billion. During the next three months, this figure fell to $114 billion.

The second-largest bank in Europe, BNP Paribas, lost $19.7 billion in market cap amid the pandemic. That’s a 26% plunge in eight months. In January, the combined value of shares of the French financial giant was $74 billion. The data reveals this figure stumbled to $54.3 billion in July.

As to Europe’s third-largest bank by assets, Banco Santander SA, it lost 49% of its market cap. According to the report, the Spanish bank had $66.97 billion in market capitalization in December 2019. By the end of August, this figure fell to $33.7 billion.

Nevertheless, Lloyds Banking Group reportedly witnessed the most significant drop in market capitalization this year. Its figure dropped from nearly $58 billion in December to $25.1billion in August. That means a 56% plunge in eight months.

The outlook has clearly become more challenging since our first-quarter results, with the economic impact of lockdown considerably larger than expected at that time
António Horta-Osório, the Lloyds Bank chief executive officer

Meanwhile, the market cap of ING Group, as the fifth-largest bank in Europe, fell by 32% since the beginning of 2020. Its combined value of shares dropped from nearly $47 billion in January to $31.8 billion in August.

We’ve reported that this fall, BNP Paribas will issue its first biometric payment cards with a built-in fingerprint sensor. The bank aims to roll out between 10,000 and 15,000 Visa Premier biometric cards, according to electronic and innovative payments manager Jean-Marie Dragon.

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