Banks Monitor: 1Q26 Earnings Heatmap: smaller beats and upgrades

Research evidence excerpt

Banks Monitor: 1Q26 Earnings Heatmap: smaller beats and upgrades

Deutsche Bank

Research

Emerging Europe Industry Date

Europe 18 May 2026

Banks Monitor

Banks Industry Update

Banks

1Q26 Earnings Heatmap: smaller beats

and upgrades

Benjamin Goy

Pre-provision profit beat by 4% and grew by 9% YoY; 1% upgrades so far Research Analyst

While markets and the sector remain volatile, given geopolitical events, the +49-69-910-31946

operating performance of European banks was very solid again in 1Q26. Beats were

Giovanni Razzoli, CFA

lower than in the past, but the mix was good with modest beats by net interest Research Analyst

income and fees, as well as decent cost control and despite some new forward +39-02-40245212

looking provisions for the Gulf war and its repercussions. Consensus sector

Alfredo Alonso

earnings moved up by 1% over results, and we expect more upside as European rate

Research Analyst

hikes are confirmed in the coming months. We remain positive on the sector and

+34-913351153

expect a rerating from the current mid-cycle valuation (9.1x 2027E EPS but with

above average 2027E total yield of 8.6%), given a strong profitability outlook (ROTE Robert Noble

expected to rise to 16.4% next year). Research Analyst

+44-020-754-10088

Solid top-line performance Marlene Eibensteiner

Despite a meaningfully negative day count effect, net interest income continued to

+49-69-910-46423

grow (+1% QoQ and +5% YoY) and beat expectations by 1%. Regionally growth and

beats were most consistent in Benelux, followed by Greece and Nordics. We expect Sharath Kumar

margin trends to remain positive in light of higher swap rates and upcoming central Research Analyst

bank hikes, as well as largely resilient volume growth. Additionally, fee income had +44-20-754-79527