Financials
Our Sector
The STOXX 600 European Financials Sector, consisting of 47 banks (SX7P), 31 insurers (SXIP) and 33 diversified financials (SXFP) encapsulates the majority of themes driving world stock markets: Interest rates and inflation, credit cycles, sovereign risk, technology (FinTech) and commodities. Relative performance to the STOXX 600 since the dotcom bust shows the appeal and versatility of specialist knowledge of these three critical subsectors. See below for some recent examples of our Spec Sales Signals
Market Update – Feb 2025
Financials in Europe continue to perform well with banks leading the charge and making decade-highs versus the wider market. 4Q24 earnings confirmed the stronger-for-longer net interest income story, and capital return plans underpin valuation with average 6-7% dividend yields. M&A, notably in and from Italy will rumble on as BBVA completes its acquisition of Sabadell and UniCredit’s multi-pronged acquisition approach plays out.
Credit risk remains muted and healthy ROTEs suggest that while further upside may be limited, and catalysts are now critical, the banks remain in rude health. Diversified financials may also be a hotbed of M&A in coming quarters while the insurance sector has a pause for breath with pricing and levels of catastrophe critical.
Recent Spec Sales Snapshots
Capital at Risk | For Professional Clients Only
Our Financials Team
Jonathan Tyce
Founder and CEO, Banks
30 years covering financials as Buyside, Hedge Fund and Sellside including JO Hambro, Fox-Pitt Kelton, American Express Asset Management and Bloomberg Intelligence. Jonathan is our lead on the banks.
Phill Haggard
Insurance
35+ years in financials, spec sales sell-side, KBW, Merrill Lynch, Phil is our resident insurance specialist and lead on a couple of the Alpha capture programs
Richard Wynne-Griffith
Specialist Sales
35+ years in financials, Richard was latterly Head of Sales at both KBW and Fox-Pitt Kelton. His network, market experience and context across the financials space provides invaluable context
Karl Morris
Specialist Sales, Div Fins Lead
25+ years in financials, Karl’s experience has been both as analyst and spec sales, with the bulk of his career spent at KBW. An in-depth knowledge across all three subsectors with a focus on div fins ideas.
Our Approach
As sector specialists, we aim to articulate the various attractions and risks discounted into the sub-sectors of European banks, European insurance and European diversified financials. Set against the context of the wider market – in this case the STOXX Europe 600 – we are also benchmark aware and incorporate the relative growth and outlook of our specialist sectors versus the wider market for context and weighting assessment.
Our four primary strategies to generate alpha are:
1.
Absolute longs or shorts, with idiosyncratic drivers and catalysts that render a hedge unnecessary or redundant.
2.
Stock pair trades – e.g. Italian banks vs. Swedish banks, or long-short in a particular country or special sit.
3.
Sector relative single name ideas with clear catalysts and valuation rationale.
4.
Sub-sector relative or rotational trades – e.g insurers vs. banks, M&A prey vs. predators.
Our Product
A wealth of experience, combined with the flexibility in approach, ability to cherry-pick best ideas and avoid stale coverage models. Services include a regular flow of value-add ‘Sales Desk’ and analytical commentary; generation of money-making, actionable investment ideas; direct access to specialist sales (scheduled calls /emails). We can help investors contextualise the financials sector vs. shifting macro- and market environments.