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European investors can breath a sigh of relief. Banks there are posting higher-than-expected profits.
British Lloyds Banking Group recorded a return to profitability for the first time in two years. The bank said it made 1.6 billion pounds in pretax profit for the first half. Standard Chartered also struck an upbeat tone, as the British bank posted 11 percent growth in a first-half net profit.
Meanwhile, lower bad debts propelled higher-than-expected profits at Barclays, Europe's sixth biggest bank by market capitalization. The bank posted a half-year profit of over 3.9 billion pounds. While French Societe Generale announced its net profits for the second quarter have tripled from a year ago.
But some analysts are cautious, saying the banking sector is still fragile. Ongoing regulatory and economic uncertainty reined in investor optimism.