Market Cap of Europe’s 5 Biggest Banks Falls 42%

New data has shown that Europe’s major banks have lost tens of billions of dollars in market capitalisation since January.

According to figures released by StockApps, the combined market cap of the five largest banks in Europe fell to $233.1 billion in August, a decrease of 42% since the start of 2020.

The massive loss in value for European banks can be attributed to the COVID-19 pandemic and its effect on consumer demand. Major European lenders were hit by a wave of financial losses during Q2, sinking their market value.

HSBC, Europe’s largest bank by asset value, saw its market cap plunge 45% to $88.1 billion in August, down from $161.5 at the beginning of the year. This figure began to slip even before the COVID-19 pandemic reached its height, falling to $114 billion in March.

Stark losses plagued Europe’s other major banks as well; PNB Paribas, Banco Santander SA and ING Group – the second, third and fifth largest banks in Europe – saw respective market capitalisation slides of $19.7 billion, $33.27 billion and $15.2 billion respectively.

Lloyds suffered the heaviest losses of the “big five”, its market cap standing at $25.1 billion in August, down from $58 billion at the end of December 2019 – a 56% drop. The fall stems from its £676 million losses in Q2, a drastic fall from the £1.3 billion profit it posted in the same period during 2019.

“The outlook has clearly become more challenging since our first-quarter results, with the economic impact of lockdown considerably larger than expected at that time,” Lloyds CEO António Horta-Osório commented on the losses at the time of their release, which caused Lloyds to set aside an additional £2.4 billion as debt provision.

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