Bank Europe (BNK) : Not out of the wood yet

Lyxor ETF Europe 600 Bank - BNK - 07/05/19

Short term Trend: Positive (65/100)
Long Term trend: Negative (20/100)

Scores computed by our proprietary algorithms - cf methodology

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Characteristics of the ETF

The Lyxor BNK ETF (Banks Europe) created in 08/2006 in Euro on Euronext and seeks to replicate the STOXX600 Bank Europe Index which is composed of the main European banking stocks. About half of the capitalization quotes in Euro, the other half is made up of English, Swiss and Nordic banks.

The costs of this ETF are 0.3% and the AUM approximately 486M €. Replication is indirect (via a swap) and there is a dividend capitalization policy.

Alternative ETFs: CB5 (Amundi in Euro), EXV1 (iShares in Euro).

Index profile

The interest of the BNK tracker lies in the fact that it groups together the 47 largest banks in the main European economies, with a great geographical diversity and a good North / South mix (31% UK, 15% Spain , 10% France, 9% Switzerland, 9% Italy), while relying on the strongest and most capitalized securities BNK brings together banks specialized in the retail (Lloyds or Santander for example) but also so-called universal banks like the French banks (BNP, SG and CA), which rely on both an investment bank and a retail model.

The activities of the big banks are well represented, and the banks are currently in "transition" mode as the 2008 crisis has left its mark on a number of fronts: following central bank actions and QE programs, banks saw their margins erode because of negative rates, while they could no longer place their deposits at the ECB and are now experiencing a very flat yield curve with long rates remaining at very low levels.

On the other hand, the increased regulatory requirements have forced banks to significantly increase their own funds, which amounts to reducing the leverage and therefore the risks associated with their operations, but mechanically leads to lower ROCEs.

In addition, the banking model is increasingly challenged by more innovative players, the "fintechs" who redefine the customer relationship and the notion of service in the financial world through offers with high technological content, while new approaches disruptive devices such as the blockchain that secures transactions outside any "third party" could in the long run threaten the role of banks as intermediaries in the economies of developed countries.

However, bank valuations already incorporate many of these risks, while a number of them have already embarked on ambitious transformation / digitization plans and should take advantage of ongoing changes. In the same way that the distribution was transformed 20 years ago by the arrival of the actors of the web, without disappearing so far, it is likely that banks will follow the same path of adaptation and modernization without prohibiting acquire knowledge by buying fintechs.

Technical Analysis

Monthly data analysis

The monthly chart shows a trend that remains bearish despite the rebound in progress since the beginning of the year which forms a V bottom figure whose potential remains to be confirmed. The downtrend channel active since September 2017 has been invalidated, but the index will have to go through several other steps before reversing the trend. Crossing EMAs12 & 26, the MACD upward  reversal and its crossing of the zero line must be validated to turn this rebound into a medium / long-term bullish recovery.

Weekly data analysis

On the weekly chart we can better observe the improvement in progress, with a confirmed cross between the EMAs12 & 26, the upward shift of all technical oscillators and the MACD which is about to cross upward the zero line. However, the index remains stuck under the EMA100 which constitutes the main resistance in the medium term. His overtaking confirmed would be a bullish signal to take seriously.


BNK is a UCITS ETF, listed in EUR, which seeks to replicate the STOXX Europe 600 Banks Net Return EUR index (47 european banks)


Inception date 25/08/2006
Expense ratio 0,30%
Issuer Lyxor
Benchmark Stoxx600 Banque
Ticker BNK
ISIN LU1834983477
EU-SD status No
Exchange Euronext Paris
Assets Under Management 486 M€
Dividend Capitalization
PEA (France) Yes
SRD (France) Yes
Currency Risk Yes
Number of Holdings 47
Risk 4/5

Country Breakdown

United Kingdom 32%
Spain 14%
France 11%
Switzerland 9%
Italy 9%
Sweden 7%
Netherlands 6%
Others 11%

Sector Breakdown

Financials 100%

Top Ten Holdings

HSBC Holdings 18%
Banco Santander 8%
Lloyds Banking Group 6%
BNP Paribas 6%
UBS Group 5%
ING Groep 5%
Intesa San Paolo 4%
Barclays 3%
Crédit Suisse 3%