Has an inflection point been reached for European financials?

Rob Burnett, manager of the Neptune European Opportunities fund, discusses the drivers behind the recent turnaround for the European financials sector and whether the rally has further to run.

This time a year ago the European banking sector faced a near existential crisis. The European Central Bank's (ECB) proposal to move interest rates deeply into negative territory threatened to remove banks' ability to generate any profits, and a full scale crisis in early February was possible. Thankfully the ECB (and the Bank of Japan) realised the error of their ways, and further moves to negative interest rates appear a thing of the past. It was this move to abandon further rate cuts that led to the significant rotation from bonds and quality growth into equities and value.  Man...