French Banks' Retail Recovery Isn't Enough to Close Gap With Sector -- Market Talk

Dow Jones08-22

1641 GMT - Though French banks are seeing a recovery in their domestic retail operations, this alone won't be enough to close the valuation discount to their European peers, Keefe, Bruyette & Woods says in a research note. The French retail segments of the country's three listed banks contributes just over a tenth of their overall adjusted profits, but have a disproportionately large influence on investor sentiment, analysts write. An improvement in this area will provide some reassurance, they add. Despite this, analysts remain cautious on the sector as BNP Paribas faces capital constraints that could weigh on returns, and Credit Agricole struggles with earnings visibility and group-wide complexity. They lower their ratings on both banks. Both banks seem attractively priced, but the relative valuation discount is likely to persist, they add. (elena.vardon@wsj.com)

(END) Dow Jones Newswires

August 21, 2025 12:41 ET (16:41 GMT)

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An improvement in this area will provide some reassurance, they add. Despite this, analysts remain cautious on the sector as BNP Paribas faces capital constraints that could weigh on returns, and Credit Agricole struggles with earnings visibility and group-wide complexity. They lower their ratings on both banks. Both banks seem attractively priced, but the relative valuation discount is likely to persist, they add. 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