The latest edition of A&M Valuation Insights – German vs. European Banks reveals a favorable turn in market dynamics: rate cuts and resilient stress test outcomes are lifting bank equities, compressing the cost of capital, and pushing price-to-book multiples to record levels.

Notably, for the first time since December 2020, German banks now trade at higher price-to-earnings ratios than their European peers.

The report also highlights a nuanced profitability landscape—listed European banks outperform unlisted institutions overall, with Germany as the key exception where profitability remains broadly comparable.

Capital positions strengthened in H1 2025 as RWA density fell, supported by strong operating performance and temporary CRR III effects.

Meanwhile, M&A activity across Europe continues to be robust, driven by sizable domestic deals in Italy and Portugal. This edition sets the stage for a deeper examination of valuation trends, performance drivers, and strategic implications for investors and executives navigating a rapidly evolving banking market.