Business · Markets · 3 hrs ago
Debt concerns push up European banks’ cost of capital
European banks’ average cost of capital rose to 12% in October, up from 11% a month earlier, according to FactSet.
The increase came after France’s 10-year bond yield topped 5%, raising concerns that debt-market pressure could spread to other European countries.
The cost of capital is the return investors require before buying a company’s shares, so a higher figure signals that they see more risk.
Investors are demanding a larger risk premium from banks, partly because government bonds can now offer higher returns than some riskier investments.
Santander’s figure was 12.4% and BBVA’s was 11.6%, while the average for the six listed Spanish banks ranged from 9.3% to 12.4%.
Analysts say the rise reflects greater uncertainty, although experts cited in the story do not expect the situation to worsen.
Analysts have also observed falling bank valuations, but no further developments or next steps are specified.
The average cost of capital for European banks rose from 11% to 12% in October, according to FactSet data cited by Expansión.
The increase followed rising market concern over French debt and the possibility of contagion to other European countries.
The yield on France’s 10-year bond exceeded 5% the week before the article was published.
Santander’s cost of capital was 12.4%, while BBVA’s was 11.6%.
Analysts said investors were demanding a higher risk premium from banks.
- Who
- European banks, with figures reported for Spanish and other large European lenders.
- What
- The average cost of capital for European banks rose from 11% to 12% in October.
- When
- October 2026, according to the article published on November 3, 2026.
- Where
- Europe, with the article highlighting France and several Spanish banks.
- Why
- Concern over French debt and broader uncertainty increased investors’ perception of risk.
This story does not have two clearly opposing sides.
European banks’ cost of capital rose to 13.5% amid market jitters linked to tensions in the Middle East and higher oil prices.
The cost of capital began to fall progressively.
The sector’s cost of capital stood at 11%.
The European banking sector’s cost of capital rose to 12%.
France’s 10-year bond yield exceeded 5%.
- European banks’ average cost of capital
- 12% in October, up from 11%
- Santander
- 12.4%
- BBVA
- 11.6%
- France 10-year bond yield
- Exceeded 5% the week before publication
- Top March level for European banks
- 13.5%
What people are saying
The market is demanding an additional risk premium from banks and considering them a riskier investment than the market as a whole.