Is the Worst Over for Europe's Banks ?

Europe On The Globe

Financial stocks boosted European markets with better-than-expected performance, but headwinds remain, Gemma Godfrey of Brooks Macdonald Asset Management says.

"It's the fact that they didn't disappoint as much as analysts expected," she said, noting one bank's quarterly earnings: "Profits fell by 50 percent - by 50 percent - but expectations were a lot worse."

On CNBC's " Fast Money ," Godfrey said that the global trend for financial names was toward shoring up their balance sheets.

"We would say that the divergence is stark," she added, noting that valuations were increasingly attractive.

However, Godfrey said, it wasn't clear sailing from here.

"The pressure on profits is going to remain," she said. "Going forward, how are they going to be extract growth? Retail banking is still stagnating, and it's a very tough situation."

Even Germany, whose economy was relatively strong, still had banks with "a lot of exposure to periphery debt," she said.

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