Europe’s banks have had a stellar year. Now they face one big question in 2026

Key Points

Europe’s banking sector has flourished in 2025, with lenders notching their strongest annual showing since 1997.
Now, after a strong third-quarter earnings season, banks must decide how and where to put their “significant” excess capital to work in 2026.
Strategists see the sector as a strong diversification play for investors in 2026.

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Finance

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