It's a golden age for banks, with profits at their highest since 2008.

Shares of major European banks have reached their highest levels since the 2008 global financial crisis, thanks to the sharp rise in long-term interest rates that fueled exceptional profits. The Financial Times reports this, describing a "renaissance" and citing the cases of HSBC, Barclays, and Santander, as well as Unicredit, which "hit its highest level since 2011."

Although banking stocks have fallen sharply in the wake of US tariffs, banks in the European benchmark Stoxx 600 index are still up 34% year-to-date. This is higher than their US counterparts and in line with their best performance since 2009.

Banks remain one of Europe's most unpopular sectors, having struggled to recover from past crises and compete with US rivals, but have been helped extraordinarily favorably by the high interest rate policy decided by the European Central Bank from mid-2022.

Italian banks in particular have benefited, with their 2024 profits hitting record highs: sector revenues reached a total of €46.5 billion, up €5.7 billion (+14%) compared to 2023. This was reported by Fabi, the autonomous federation of Italian banks, in a study published a few days ago. This result brings the total profits for the three-year period 2022-2024 to over €112 billion. This exceptional three-year period for banking profitability is poised to become a four-year period, should the impact of Trump's customs policy not prove so severe. However, it's highly likely that the golden age for banks is coming to an end, given that interest rates have returned to 2%.