Competitive pressures have intensified but we still expect French banks’ profits to grow this year, supported by retail and corporate and investment banking. But profitability still lags EU peers, as large operating structures weigh on cost efficiency.

Wednesday, July 23rd 2025 - 3:00 PM (CEST)

Santander’s acquisition of TSB from Banco de Sabadell reflects a broader trend among EU banks of strengthening core markets via acquisitions, while for Sabadell, it represents a renewed focus on its domestic market.

Les économies américaine et européenne connaîtront une croissance plus lente que prévue en 2025, contribuant à un ralentissement de la croissance économique globale. Les perspectives de l’économie mondiale restent orientées à la baisse, selon Scope Group.

The US and European economies will expand more slowly in 2025 than previously forecast, contributing to more moderate global economic growth, with risks for the global economy and global credit risk skewed to the downside, Scope Group says.

BPCE’s announcement of the acquisition of 75% of Novo Banco, Portugal’s 4th largest bank, from Lone Star Funds represents an important development in European bank M&A.

Spanish banks’ net interest margins reached their lowest level in Q1 vs 2024, yet profitability continues to improve, driven by higher loan volumes, sustained growth in fees and commissions and strict cost discipline.

UK bank profitability will remain sound in 2025. Asset quality is weakening modestly but remains resilient, capital is adequate and deposit outflows have reversed. The stable outlooks on our UK bank ratings indicate that risks are broadly balanced.

Bolt-on acquisitions and investments will improve the group’s diversification and consolidate its pan-European market position, but transformational deals remain complex and subject to political barriers.

Italian banks are among the most profitable in Europe and the outlook is favourable, even if we anticipate lower profits in coming quarters. M&A may reshape the sector, though execution risks are rising.