Bloomberg News reports that a rout in bank stocks deepened on Thursday after Societe Generale's missed fourth-quarter profit estimates, with earnings declining 35% at the investment bank. Credit Suisse shares closed at 12.31 Swiss francs ($12.61), down 8.4%, bringing losses to about 43% this year. That’s more than the 41% drop in 2011, at the height of Europe’s fiscal crisis.
'It’s a lack in trust in the ability of banks to earn as much as they once did', said Benno Galliker, a trader at Luzerner Kantonalbank. 'There’s still decent money but not as much as they once did. They can’t take as much risk as they once did'.
Banks across Europe have reported a slump in trading revenue, hurt by a drop in energy prices, stricter capital requirements and cooling emerging economies. Societe Generale signalled on Thursday that it may miss its profitability target for this year, citing 'headwinds' including volatile markets and record low interest rates.
The shares bounced back a bit in early trading Friday.
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