European banks' NII growth to hit 4% in 2026, says Morgan Stanley

ING Groep NV

24/11/2025 07:20

** Morgan Stanley analysts see net interest income (NII) growth accelerating to 4% in 2026 for European banks after muted growth this year, driven by expanding margins and volume growth

** Improvement in PMIs point to an acceleration in loan growth, they say, while expecting loan growth to double to 4-5% y/y at a euro area level

** Project greatest acceleration in loanmaking in Spain and note that Ireland should also be strong, while among core countries, they expect lending in Germany to accelerate most

** The analysts move Barclays BARC.L to their top picks, alongside Santander SAN.MC, Societe Generale SOGN.PA and ING INGA.AS, replacing Lloyds LLOY.L

** They upgrade Standard Chartered STAN.L and Bank of Ireland BIRG.I to "overweight" from "equal-weight" on above-consensus revenue growth, while cutting  KBC KBC.BR to "equal-weight" from  "overweight" on valuation

** They keep their "equal-weight" rating on BNP Paribas BNPP.PA unchanged

 (Reporting by Anna Pruchnicka)

 ((anna.pruchnicka@tr.com))