European Banks Still Undervalued Despite 2025 Rally, Three Stand Out

Industry
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Summary · why it matters

European banks remain attractively valued compared with many U.S. peers despite a strong 2025 rally. Banco Bilbao Vizcaya Argentaria reported a return on tangible equity of 21.7% and a Common Equity Tier 1 ratio above 12% in the first quarter of 2026, yet trades at around 10.3 times forward earnings with a 4.63% dividend yield. Banco Santander has surged nearly 65% over the last 12 months, retains a 15% return on tangible equity with a 14% Common Equity Tier 1 ratio, and trades at just 11 times earnings with a 1.57% dividend and an approximately 17% dividend payout ratio. ING Group offers a 4.7% yield and trades at about 11.4 times forward earnings, but its 16% Common Equity Tier 1 ratio and 57% dividend payout ratio present a more mixed risk-reward setup.

Impact on stocks 4

Financials▲ · 3 stocks
ING Group NV ADR
ING
▲ PositiveCapitalrelevance

Article highlights ING's attractive valuation (11.4x earnings, 4.7% yield) and strong capital ratio (16% CET1), suggesting undervaluation.

ING Groep NV
INGA
▲ PositiveCapitalrelevance

ING Groep NV is same as ING Groep N.V. (index 0), same reasoning applies.

Digital Finance & Tokenization▲ · 1 stocks
Banco Santander S.A.
BNC
▲ PositiveCapitalrelevance

Santander surged 65% in 12 months, has 15% ROTE, 14% CET1, trades at 11x earnings with low payout, indicating undervaluation.

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