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European bank equities have delivered a historic rally in 2025, marking one of the strongest years on record for the sector and signalling a decisive shift in investor sentiment after more than a decade of underperformance.
The EURO STOXX Banks Index is up 76% year-to-date as of 12 December, putting it firmly on course for its best annual performance ever, surpassing even the 74% surge recorded in 1997.
What makes the rally particularly striking is its breadth. Every constituent of the index has posted positive returns, while a growing cohort of lenders has achieved triple-digit gains….
