The Financials Statement: 2H26 Outlook; Tier 1 Picks and Pans

Research evidence excerpt

The Financials Statement: 2H26 Outlook; Tier 1 Picks and Pans

J P M O R G A N Europe Credit Research

19 June 2026

The Financials Statement

2H26 Outlook; Tier 1 Picks and Pans

Europe Corporate Credit - Banking & 2H26 Financials Outlook: Tweaking half-time tactics

Financial Services (IG)

This week, we published our 2H26 Financials Outlook, setting out our AC Gareth Davies, CFA

updated thoughts on the European Banks and Insurance sectors, and where we

(44-20) 3493 0672

currently see value within the space. We view the sector as entering the 2H gareth.davies@jpmorgan.com

with its fundamental outlook broadly intact, given the counter-balancing AC Drishti Sharma, CFA

impacts of higher rates and slower growth. However, we amend a few of our (44-20) 7134-0278

tranche recommendations to reflect performance over the 1H, and to account drishti.sharma@jpmorgan.com

for potential ‘curveballs’ that we view likely to episodically challenge J.P. Morgan Securities plc

sentiment, and constrain further outperformance, particularly of

subordinated risk (namely: Private Credit, CRE and Geopolitical/Sovereign

volatility). Our suggestions for 2H26 are as follows: Publications of Note

Outlooks

• AT1 (€ and $): we remain Neutral, with relative carry to lower beta 2H26 Outlook: Tweaking half-time tactics

alternatives further eroded, and with grandfathering not a guaranteed

2026 Outlook: Sunny with a Chance of catalyst for performance in the 2H in our view;

Curveballs

• RT1: we move to Overweight, with supply and structural risk-reward 2H25 Outlook: Banking on Banks now appealing;

Sector Handbooks

• Tier 2: we move to Neutral both in Banks and Insurance, seeing little

Banks Credit Handbook further room for sub-senior compression to drive performance;

Insurance Credit Handbook