A toxic combination of rising bad loans, China exposure worries, energy sector volatility and the prospect of negative interest rates has sent bank stocks tumbling in recent weeks.
In Europe, concerns over high levels of bad debt in Italy put UniCredit, Banca Monte dei Paschi di Siena and Banco Popolare under pressure, a situation that was exacerbated when the European Central Bank requested information on nonperforming loan portfolios from these banks.
But on Friday, broader European bank stocks rebounded after a positive earnings report from Commerzbank and news that Germany's biggest bank, Deutsche Bank, would buy back more than $5 billion in senior debt.
Meanwhile, Japanese banks suffered heavy selling after the Bank of Japan (BOJ) surprised markets by introducing negative interest rates at the end of January. The move sparked a sell-off in the country's stock market as well as rapid appreciation in the yen, particularly against the dollar.
Banks including Mitsubishi UFJ, Sumitomo Mitsui Financial Group, and Mizuho Financial have lost nearly 20 percent on average since the BOJ's decision.
And Stateside, the financials sector is the worst performing sector on the S&P year-to-date, down more than 15 percent according to FactSet.
In light of the uncertainties surrounding the sector, give us your view.
— Katy Barnato contributed to this report.
