Against expectations, European banks are thriving

In 2020when BBVABBVA, and Sabadell abandoned merger discussions, it was difficult to find investors with anything positive to say about European banks. A decade of near-zero interest rates, stiff regulation and anaemic economic growth had made them unprofitable and unattractive. The two Spanish lenders were no exception. had a market value of €26bn ($32bn), less than 40% of its 2007 peak. At €2bn, Sabadell was worth only a fifth of the accounting (“book”) value of its equity.