Assessing the fall-out from the quarterly earnings season, Goldman said the overall trend was “down, but not as much as expected”.
Clean pre-tax profits were off across Europe by “sharp” 55%, which was some 20% above the investment bank’s estimates.
The overriding theme, Goldman said, was the cancellation of dividends, which has been widespread.
“Whilst managements of stronger banks were keen to underline their conviction of a dividend return to normal next year, investors’ reluctance to incorporate this into their investment thesis is at an all-time high, in our view,” said the Wall Street giant in a note to clients.
There is not much consensus among banking analysts at present, with HSBC a ‘sell’ for those at Deutsche Bank, along with NatWest Group PLC (LON:NWG), though the German bank’s analysts like Barclays PLC (LON:BARC).
Not so for those at Citigroup, who do not fancy Barclays, seeing it at most at risk of additional charges; whereas Natwest is seen as the “most prudent” and therefore best positioned for Citi.
More sanguine was Berenberg, which likes NatWest, Barclays and StanChart, while UBS likes most of the banks.
Shares in Asia focused HSBC and Standard Chartered were respectively up 1.1% and flat on Wednesday.