By Ed Frankl

 

Shares in European banks dived on Friday, tracking U.S. banking stocks overnight that fell on market jitters after tech-focused lender SVB Financial Group said it lost $2 billion selling assets following a slump in deposits.

The Stoxx Europe 600 Banks index, which tracks the continent's largest lenders, was down 4.1% at 0920 GMT.

Among Europe's larger banks, HSBC Holding PLC shares in London are down 5.5%, Lloyds Banking Group falls 3.1%, Deutsche Bank AG dives 7.9%; BNP Paribas SA slumps 3.9%; ING Groep NV sinks 5.3%; Intesa Sanpaolo SpA drops 3.1%; Banco Santander SA dips 5.2%; and UBS Group AG tumbles 4.5%.

The fall in the sector's stocks wipes out some of the gains in market value that banks have made since the start of the year, driven by a strong set of earnings on the back of rising interest rates that fed into income from loans.

However, since the start of the year, the index is still up 13%, according to FactSet data.

More than $50 billion was wiped out Thursday from the top four U.S. lenders--JPMorgan, Bank of America, Wells Fargo and Citigroup--spooked by contagion fears after SVB's decision to sell a large chunk of its securities portfolio at a loss.

While the sharp rise in interest rates and bond yields over the past year was expected to expose some issues in financial services, SVB's issues don't constitute a Lehman moment for the industry, according to analyst Gary Greenwood of Shore Capital.

 

Write to Ed Frankl at edward.frankl@wsj.com

 

(END) Dow Jones Newswires

March 10, 2023 05:00 ET (10:00 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.
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