Credit Suisse and Deutsche Bank are excluded from the index STOXX-50

Two of the largest European banks - Credit Suisse (CSGN.S) and Deutsche Bank (DBKGn.DE) - Monday will be excluded from the index of European top 50 blue chips. This is yet another serious blow to the EU's financial sector. For Deutsche Bank it will happen for the first time since 1998, when he also was expelled from STOXX50 rating.
Solution STOXX Ltd, which manages European stock indexes tests appeared after there was a twofold reduction in the value of shares Credit Suisse and Deutsche YTD. Shares of Deutsche now more than 88 percent below its 2007 peak. Commerzbank (CBKG.DE) sent a warning about falling profits and negative interest rates, resulting in lowered their shares to a record low.
Banks in Europe are struggling with reduced profits and plummeting investment income amid falling profits and higher regulatory costs.
Although the results of the recent stress tests of European banks in the regional banking authorities have been met by investors with a sense of relief, the fact that the tests did not take into account interest rates, which will be negative for a long time, was greeted quite critical.
"If rates remain at this low level, interest income will not be that eliminates most of the investors and the capital base, and at this point it is difficult to understand that the banks are in a strong position" - Gerhard Schwarz says head of equity strategy at Baader Bank, Munich.
Exclusion from the top 50 usually means that exchange-traded funds and other passive investors that track the index, will be forced to sell the shares that will result in an even stronger sales.
European banking index SX7P fell by 2.8%, showing the worst result this year as a whole decreased by more than 30%.
Two msklyuchennyh Bank will be replaced in the index Stoxx Europe 50 technology firm ASML Holding (ASML.AS) and construction company Vinci (SGEF.PA) STOXX50 officials said that the changes will take effect from 8 August.