A set of positive earnings from European banks helped to boost investors' confidence on Tuesday, with CEOs and analysts signaling that the crisis-hit banking sector has turned a corner.
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Deutsche Bank reported forecast-beating net profit for the third quarter while Erste Bank swung from a loss in the third quarter last year to a profit of 143.7 million euros ($186.2 million) in the same quarter this year.
UBS posted a loss but its decision to wind down its fixed-income business and cut 10,000 jobswas welcomed.
The unit suffered significant losses since the crisis began and CEO Sergio Ermotti hopes the changes will transform the group and make its earnings healthier.
The stock hit a 15-month high on the news.
"I'm very pleased with the way we performed in the third quarter…it really started bad but…across the board we were able to manage profitability in all the segments of the bank. If you look at wealth management we had the best quarter in five years in terms of making money," Ermotti told CNBC.
Chris Zwermann, global strategist at Zwermann Financial told CNBC that banks were at a turning point.
"A lot of them (the banks) have done a lot of restructuring already and that means we're seeing a turnaround," Zwermann said.
He was particularly bullish on Deutsche Bank.
"We have this long-term downtrend," Zwermann said. The stock, which has been declining since 2010, had now broken the 33 euro per share level and was heading towards 40 euros, he said.
"From here on we have quite a way to go to the upside….This downtrend is already two years old," he said.
Meanwhile Erste Bank benefited from a strong performance in Central and Eastern Europe.
"In this period of time I think the strength of Central and Eastern Europe comes into play and the fact that the countries are substantially less indebted than in Western Europe," Erste Bank CEO Andreas Treichl told CNBC.
"In principle I think our results are a demonstration of the fact that Central and Eastern Europe is doing quite a bit better than Western Europe.
" "We cleaned up a lot of things a year ago and this year the third quarter is just a normal quarter," he added.
He believes the worst is over for Central and Eastern Europe.
