LONDON, Feb 9 (Reuters) - Futures prices for European banks fell on Tuesday, as concerns mounted over the health of the region’s top lenders given signs of a global economic slowdown.
Futures on the Euro Stoxx Banks index fell 0.7 percent.
Italian and Portuguese bond yields also climbed higher on Tuesday, which could add further pressure to the shares of major banks in those countries.
The STOXX Europe 600 banking index had already fallen 5.6 percent in the previous session, taking its total losses to around 24 percent this year on concerns about banks’ profitability and capital strength in an environment where monetary stimulus continues to put pressure on margins.
Deutsche Bank fell 9.5 percent on Monday as concerns mounted about its ability to maintain bond payments. The German bank said late on Monday that it had “sufficient” reserves to make due payments this year on AT1 securities.
The cost of insuring bank debt against default also climbed on Monday to its highest since late 2013. Borrowing costs in Spain, Portugal and Italy jumped as investors demanded a fatter risk premium over safer German paper, where two-year yields hit record lows at minus 52 basis points. (Reporting by Sudip Kar-Gupta and Atul Prakash)