European banks starting to look attractive again

The elimination of political uncertainty in Europe following Emmanuel Macron’s win in the French presidential election, coupled with recent strong economic data for the Eurozone, has made Eurozone banks more attractive as potential investments, particularly banks in France and Benelux that have low non-performing loans and solid profitability. Many Eurozone banks still trade at lower valuation multiples compared to US banks and will also benefit from higher interest rates in the region once the ECB starts normalizing monetary policy (expected in mid-late 2018). Following the French election result, the Active Banking Fund has, once again, started taking positions in select Eurozone banks and these positions may be increased in the near future conditional on earnings strength.