UniCredit SpA (UCG), Italy’s largest bank, rose as much as 5 percent in Milan, and was up 3.3 percent to 6.68 euros by 5:27 p.m. Spain’s Banco Sabadell SA (SAB) jumped as much as 5.2 percent, while National Bank of Greece SA climbed as much as 6.9 percent. The 29-company Euro Stoxx Banks Index climbed as much as 3.3 percent, the largest intraday gain since January.
ECB President Mario Draghi unveiled a round of measures to help record-low interest rates feed through to the economy to preserve a fragile recovery and ward off the threat of deflation. Draghi announced a package of “targeted” offerings of liquidity to banks to encourage them to lend as the ECB also became the first major institution to charge fees on deposits.
“It’s the promise that they are going to keep doing whatever it takes and keep underwriting the banking system and keep underwriting you as an equity investor in Europe,” said Simon Maughan, head of research at financial-analysis firm OTAS Technologies in London. “They’re saying ‘we’re not done yet.’”
The Italy Banking Association praised the steps taken by the ECB. The decisions amount to “very innovative and effective measures to achieve a decisive, positive economic recovery,” Chairman Antonio Patuelli said in an e-mailed statement today.
German banks took a different view.
“The ECB is increasingly creating dangerous side effects,” Georg Fahrenschon, president of Germany’s DSGV savings banks association said in an emailed statement from Berlin today. “The renewed rate cut will unnerve savers all over Europe and destroy wealth rather than create the desired impulse for growth in crisis-hit countries.”
Germany’s savings banks had a total 708 billion euros ($964 billion) of loans outstanding at the end of last year.
Deutsche Bank AG, the largest German bank, fell as much as 2.7 percent in Frankfurt trading after saying investment-banking revenue may decline at a faster pace in the second quarter than it did in the first three months. London-based Barclays Plc also slumped.
Deutsche Bank’s investment-banking unit saw a “challenging market environment with low customer volumes and low volatilities in many key areas,” the Frankfurt-based company said in a statement on its website today.
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