JP Morgan rates European banks overweight, names NatWest a top pick amid strong growth outlook

JP Morgan has maintained an 'overweight' rating on European banks, highlighting a favorable environment for growth despite early signs of interest rate changes. The sector benefits from ECB rates between 2% and 3%, strong lending momentum partly driven by AI investments, and robust capital markets. JP Morgan expects average pre-provision profit growth of 8.8% annually from 2025 to 2028, with attractive shareholder payouts around 7.7% yield by 2028. NatWest Group is among JP Morgan's top European bank picks, reflecting confidence in the sector's continued strength.