Murthy Grandhi, a Company Profiles Analyst at GlobalData, provides insight into the situation, stating, “The region’s biggest lenders posted mixed results as slowing loan growth, softer dealmaking activity and mounting geopolitical risks weighed on performance. While several banks continued to deliver double-digit profit growth, revenue momentum weakened across much of Western Europe.”

Leading the pack, France’s BNP Paribas maintained its status as the region’s largest bank by revenue, recording $154.8 billion in 2025. However, this figure represents a 1.2% decline from the previous year. Despite this, BNP Paribas saw a 9.1% increase in net income, driven by robust corporate and investment banking activities and disciplined cost management. Yet, its domestic retail operations faced challenges due to regulated savings products and a subdued credit demand within France.

HSBC Holdings faced its own set of challenges, with a 3.4% decline in revenue and a 7.1% drop in net income. The bank had previously benefited from higher global interest rates over the past three years, but the pace of margin expansion is now slowing. Additionally, HSBC's commercial banking division was negatively impacted by weaknesses in China’s property market and slower trade flows across Asia.

“Russian lenders stood apart,” Grandhi notes. Sberbank, for instance, reported a staggering 38.9% increase in revenue to $142.2 billion and a 19.5% rise in net income for 2025, resulting in a three-year compound annual growth rate (CAGR) of 69.3% for earnings. However, Grandhi cautions that these figures are influenced by the ruble-denominated nature of these businesses operating in a wartime economy under capital controls, with benchmark rates exceeding 16%. VTB's scenario is even more complex, with revenue up 37.4%, but a negative 184.2% three-year CAGR for net income, reflecting the severe losses incurred in 2022 when sanctions were first imposed.

Spanish banks have continued to outperform their regional counterparts. Banco Santander achieved a 17% increase in net income despite stagnant revenue growth, bolstered by strong operations in Latin America and enhanced efficiency. Similarly, BBVA capitalised on robust earnings in Mexico, where higher rates and loan expansion supported margins.

In a notable recovery, Societe Generale saw net income soar by 49% following a restructuring phase, reduced exposure to underperforming sectors, and stabilisation in retail banking. Despite this, the bank's revenue fell by 6.2%, highlighting the challenges of sustained top-line growth in mature markets.

The UK banking sector also reported positive outcomes, benefiting from resilient consumer spending and higher interest margins. Lloyds Banking Group recorded a 17% increase in revenue, driven by mortgage repricing and improved spreads. NatWest and Barclays similarly posted healthy profit gains, as both retail and corporate banking performed better than anticipated.

UBS, still in the process of integrating Credit Suisse, experienced a nearly 10% decline in revenue. However, its net income rose sharply due to cost synergies and restructuring benefits. Deutsche Bank more than doubled its net income, thanks to reduced litigation costs, stronger fixed-income trading, and restructuring gains, even as revenue contraction highlighted the constraints imposed by Germany’s weak industrial economy. Italian banks UniCredit and Intesa Sanpaolo also reported strong profit growth despite declining revenue, benefiting from higher euro-zone rates and streamlined operations.

Looking ahead, Grandhi offers a cautionary outlook: “GlobalData expects EMEA banks to face tougher conditions than those seen during the post-COVID-19 pandemic rate boom. US-China tensions and potential new US-EU tariffs could reduce trade-finance demand, while Middle East instability may keep energy prices, inflation and sovereign risk volatile. Expected ECB rate cuts in 2026 threaten to compress eurozone margins, and Basel IV rules will raise capital needs, limiting buybacks and dividends.”

In response to these challenges, banks are likely to focus on accelerating digitisation, cutting costs, and expanding wealth management and fee-based businesses. Grandhi suggests that diversified, fee-heavy groups like UBS, Santander, and BBVA may prove more resilient than domestic lenders in navigating the uncertain financial landscape ahead.