Rapidly rising interest rates are making the European banking sector an attractive investment target as rising interest rates improve banks’ margins, say portfolio managers of Finland’s eQ and Aktia in financial daily Kauppalehti.

“In the bond market, interest rates and margins have increased drastically, so bank financing is an even more attractive option for companies, which enables banks to increase lending with reasonable margins,” says Dick Lund, portfolio manager at eQ.

Lund names BNP Paribas, Nordea and SEB as attractive investment targets. eQ’s Europe Dividend equity fund, which Lund manages has a 5% exposure to BNP.

According to Aktia’s Portfolio Manager Patrik Moring, bank valuations are now very favorable.

”Banks are now in a very different position than during previous crises. Solvency is at a significantly stronger level,” Moring notes.

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