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, as does the speed of the recent sell-off. See below for some recent examples of our Spec Sales Signals, with our Banks vs. Tariffs note an early indication of how far EPS could be cut if tariff wars play out badly

Market Update – April 2025

European banks’ 15% slide since Donald Trump’s Liberation day tariff announcements is a stark reminder of how quickly the outlook for banks EPS and capital return capacity can change. Since out January note, Calling Time (see below), we have been increasingly cautious after a strong period off outperformance. With the prospect of further rate cuts – this time for the wrong reasons to stave off recession – and rising cost of risk as ECL inputs deteriorate, this is no time to catch a falling knife. To discuss the outlook for banks vs. insurers, and find some interesting diversified names, contact us!

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.