European banks hit multi-year lows, Societe Generale sinks 14 pct

LONDON, Feb 11 (Reuters) - European banks slumped to new multi-year lows on Thursday, with concerns mounting over their profitability in a low-growth and low-interest rate environment.

The STOXX Europe 600 Banks index fell 6 percent to its lowest level since August 2012, dragged down by lenders such as Societe Generale, which plummeted 14 percent after posting a lower than expected rise in fourth-quarter net income.

Britain’s banking index dropped 4.3 percent, its lowest level since 2009.

HSBC and Standard Chartered fell 4 percent and 6 percent respectively. Both banks, which have large operations in Hong Kong, suffered a sell-off on the Hong Kong stock market that slumped on Thursday due to persistent worries about a slowdown in China.

Swedish banks such as Svenska Handelsbanken, Swedbank and Nordea Bank were down 3.8 to 4.2 percent, extending falls after Sweden’s central bank cut its benchmark repo rate by 15 basis points to -0.50 percent.

Greece’s benchmark banking index sank 17.7 percent to set a new record low.

Concerns about the banks were also highlighted in the credit default swap (CDS) market, which reflects the market cost of insuring exposure to bank debt, with prices rising on the ITRAXX Senior Financials Index and the ITRAXX Europe Subordinate Financials indexes.

Shares in Deutsche Bank fell 7 percent, while CDS prices also rose for Deutsche Bank. (Reporting by Atul Prakash; Editing by Sudip Kar-Gupta)