In 2017, the European banking sector achieved its second-best result since the
financial crisis (bar 2010).
Bottom-line profitability at the 20 leading institutions,
which are a good proxy for the entire market, more than doubled year-over-year
to EUR 69 bn. This is still nearly 50% below the peak 2006 level, but far above
the gloomy results of 2011-13 or 2016. The stronger performance was hardly
driven by a brighter revenue picture though: net interest income was down
another 1% yoy, fees and commissions were up 3% and trading income up 4%,
pushing total revenues 0.7% higher.
This is below inflation and economic
growth rates in the main markets, marking a deterioration in real terms. What is
more, it comes after a 6% slump in 2016. Hence, banks are still waiting for a
rebound on the income side.