Sluggish earnings sees some European banks downgraded

CREDIT Suisse First Boston (CSFB) yesterday downgraded several top European banks on valuation grounds but maintained its overweight rating on the sector.

Shares in Spanish giants Banco Bilbao Vizcaya Argentaria and Banco Santander Central Hispano fell 3.8% and 3.25% respectively by early afternoon trade after CSFB cut its ratings on both stocks.

Overall CSFB said the banking picture looked similar to 2002, where weak economic growth and uncertainty over market-related revenue made income growth challenging, though bad debts remained manageable.