Banks rally while techs struggle as European stocks edge higher

By Steve Goldstein

Deutsche Bank shares rallied Thursday after the German lender reported a surprisingly strong fourth-quarter profit, driven by asset management and corporate banking units.

Deutsche Bank /zigman2/quotes/207242873/delayed XE:DBK +6.05% share rose 5% as earnings rose to €315 million from €189 million, which will well ahead of the €26 million that analysts had forecast. Revenue also topped expectations, and Deutsche Bank said it would resume payouts with a €300 million stock buyback and a 20 eurocent dividend.

The banking sector more broadly benefited from rising bond yields in the wake of the hawkish press conference from Fed Chair Jerome Powell, with HSBC /zigman2/quotes/203901799/delayed UK:HSBA +2.27% and Banco Santander /zigman2/quotes/205677933/delayed ES:SAN +4.67% also gaining ground.

The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +1.33% rose just 0.1% to 467.53, as banking stock strength was countered by weakness in the technology sector as bond yields rose.

SAP /zigman2/quotes/202053813/delayed XE:SAP +0.80% struggled, as the German software company had already preannounced fourth-quarter results, and reiterated 2022 guidance.

Of the major regional indexes, the German DAX /zigman2/quotes/210597999/delayed DX:DAX +1.75% declined 0.2%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +1.42% declined 0.1% and the U.K. FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +1.79% increased 0.7%.

Orpea /zigman2/quotes/204431094/delayed FR:ORP -2.28% shares dropped 9%, sliding for a fourth straight session, as investors analyzed a book alleging misconduct at the nursing home operator.

Louise Boyer Grabeldinger, an analyst at Stifel, said some of the accusations could lead to legal action and fines, and the brand image impact may hurt occupancy rates. Longer term, there could be a major group reorganization and higher structural costs. Depending on the assumed multiple, the market is forecasting a drop in earnings this year between 40% and 60%.

/zigman2/quotes/207242873/delayed

Add to watchlist XE:DBK

Deutsche Bank AG

XE : Germany: Xetra

€ 9.85

+0.56 +6.05%

Volume: 22.58M

March 21, 2023 6:30p

P/E Ratio

3.88

Dividend Yield

3.05%

Market Cap

€18.93 billion

Rev. per Employee

€477,252

/zigman2/quotes/203901799/delayed

Add to watchlist UK:HSBA

HSBC Holdings PLC (UK Reg)

UK : U.K.: London

554.00 p

+12.30 +2.27%

Volume: 24.77M

March 21, 2023 4:35p

P/E Ratio

9.22

Dividend Yield

4.71%

Market Cap

£108.18 billion

Rev. per Employee

£346,838

/zigman2/quotes/205677933/delayed

Add to watchlist ES:SAN

Banco Santander S.A.

ES : Spain: Madrid

€ 3.38

+0.15 +4.67%

Volume: 67.98M

March 21, 2023 5:38p

P/E Ratio

6.50

Dividend Yield

2.83%

Market Cap

€54.08 billion

Rev. per Employee

€453,275

/zigman2/quotes/210599654/delayed

Add to watchlist XX:SXXP

STOXX Europe 600 Index

XX : STOXX

446.47

+5.87 +1.33%

Volume: 0.00

March 21, 2023 11:03p

/zigman2/quotes/202053813/delayed

Add to watchlist XE:SAP

SAP SE

XE : Germany: Xetra

€ 113.84

+0.90 +0.80%

Volume: 1.53M

March 21, 2023 6:30p

P/E Ratio

58.36

Dividend Yield

1.80%

Market Cap

€133.22 billion

Rev. per Employee

€275,730

/zigman2/quotes/210597999/delayed

Add to watchlist DX:DAX

DAX

DX : Xetra Indices

15,195.34

+261.96 +1.75%

Volume: 63,296

March 21, 2023 6:30p

/zigman2/quotes/210597958/delayed

Add to watchlist FR:PX1

CAC 40 Index

FR : France: Euronext Paris

7,112.91

+99.77 +1.42%

Volume: 54,427

March 21, 2023 6:05p

/zigman2/quotes/210598409/delayed

Add to watchlist UK:UKX

FTSE 100 Index

UK : FTSE UK

7,536.22

+132.37 +1.79%

Volume: 423,257

March 21, 2023 4:35p

/zigman2/quotes/204431094/delayed

Add to watchlist FR:ORP

Orpea S.A.

FR : France: Euronext Paris

€ 2.40

-0.06 -2.28%

Volume: 671,698

March 21, 2023 5:35p

P/E Ratio

N/A

Dividend Yield

0.00%

Market Cap

€158.72 million

Rev. per Employee

€65,308