European Banks Jump on Bets Portugal Loan Terms Will Be Eased

European banking stocks surged, paced by Spanish and Portuguese lenders, on expectation central bankers will keep providing a stimulus and that the maturity of bailout loans to Portugal and Ireland will be extended.

The 28-member Euro STOXX Banks index climbed as much as 5.3 percent, its biggest intraday gain since Sept. 6. Banco Santander jumped 5.5 percent to 5.54 euros, the biggest jump in more than seven months. Barclays Plc climbed 4.1 percent to

297.85 pence and Societe Generale SA rose 6.4 percent to 26.88 euros.

Creditors including the International Monetary Fund and European Commission recommended loans to Portugal and Ireland be extended by seven years in a joint report. Meanwhile European Central Bank governing council member Christian Noyer said that he expected the bank to keep rates low and continue injecting liquidity into the banking system.

“There is news on stimulus measures and that is perceived as positive for banks,” said Benjie Creelan-Sandford, an analyst at Macquarie Bank Ltd. in London. “There’s also the recommendation that loans to Portugal and Ireland should be extended and clearly that would explain why Portuguese banks are up.”

Banco Comercial Portugues SA surged 8.1 percent to 0.09 euros.