European Banks: Citi European Banks Weekly

Research evidence excerpt

European Banks: Citi European Banks Weekly

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European Banks

Citi European Banks Weekly 22 Jun 2026 11:12:16 ET

ACWestern Europe Andrew Coombs, CFA

Focus +44-20-7986-4053

Last week, we published a detailed report on Spain Banks - Assessing the earnings risk Simon Nellis

from digital deposit competition. In this report, we build a scenario analysis for digital

+44-20-7986-4012

deposits. We estimate that a pessimistic scenario would imply c.-2% downside for EPS

2028E on average, higher for SAB, UNI, BKT at c.-5%, and lower for SAN and BBVA at c.-1%. Borja Ramirez Segura

We prefer BBVA and SAN among the international banks, and CABK among the domestics +44-20-7508-0206

(all Buy-rated).

Shrey Srivastava

+44-20-7986-2608Ahead of Lloyds investor day (scheduled: 30th July 2026), we published a flash note Lloyds

Investor Day Preview – 30 July. Lloyds will provide a strategic update alongside their 2Q26

results on 30 July. We expect management to provide new 2028 and 2030 financial targets,

based upon conservative macro assumptions, with the aim to reach a >18% RoTE in 2028

and >20% in 2030 (alongside a <45% cost-income). Citi and consensus are already ahead of

this (2028 cons. RoTE 19.4% and Citi 21.8%) so in itself we do not expect the new targets to

act as an immediate catalyst. Where we are more constructive is on the capital return

potential; we believe Lloyds may announce a £1.75bn buyback with the interim results, with

a similar amount to follow in 4Q26, based on Lloyds aim to pay down towards a 13% CET1R

by year-end. This places us ahead of consensus EPS.

Finally, we published our Benelux Banks Monthly, June 2026: ABN Still Preferred. Despite

ABN’s ~15% outperformance vs SX7E since 1Q26 results, we still believe it stands out as an

idiosyncratic opportunity.