JP Morgan keeps European banks overweight, favoring NatWest and others despite recent sector drop

JP Morgan maintains an overweight rating on European banks, highlighting NatWest Group and Standard Chartered as top picks after a 7% sector decline mainly due to rising sovereign bond yields. The broker raised its cost-of-equity assumption, lowering the price-to-earnings multiple but still sees 15% upside potential. European banks trade at a discount compared to the broader market, which JP Morgan views as unjustified given their strong fundamentals and expected 12% annual earnings growth through 2028. Upcoming third-quarter earnings reports are expected to validate this positive outlook.

Following JP Morgan's positive stance on European banks, NatWest Group shares on Pluang have risen 3.48% to USD 17.84 as of Oct 13, 2026 18:41 WIB, reflecting investor interest. Deutsche Bank also shows modest gains with a 0.45% increase to USD 33.80. NatWest's dividend yield stands at 5.47%, highlighting its appeal for income-focused investors.