European Banks Increase in Value Expecting Fed Interest Rate Hikes

The logo of Deutsche Bank on a company's office in London, Britain, on July 8, 2019. Simon Dawson/Reuters

European bank stocks have been on an upward trend since the third week of December following the announcement by the Federal Reserve regarding interest rate hikes by early spring, indicating better business prospects for financial institutions with higher rates and greater margins.

The Stoxx Europe 600 Banks Index has gone up 9.8 percent in one month and 5.92 percent during the last 5 days, supported by the Fed minutes released recently that showed a keen focus towards hiking rates earlier than expected.