Waverton's Glasse: European banks will stay under pressure despite short-term rally

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Charles Glasse, co-manager of the Waverton European Capital Growth fund, has warned of significant headwinds for European banks, despite another recent boost for the sector following the French election first round result.

Banking shares jumped last week after En Marche! leader Emmanuel Macron's victory over National Front leader Marine Le Pen in the first round.  The Euro Stoxx Banks index leapt 7.2% last Monday to its highest level since December 2015, while shares in Société Générale soared around 10%. Are European banks still uninvestable? However, the manager - who runs the fund with Chris Garsten - said he was surprised about the market reaction, claiming earnings expectations for the sector do not match recent performance. "Banking is not great in Europe. Even though banks have gone up stro...