Investors just don’t fancy European banks. This distaste has left valuations languishing at levels low enough to imply imminent financial disaster. While this view is far too bleak, the industry’s third-quarter results in coming weeks aren’t likely to change anyone’s mind.

That’s a shame because there are potentially real bargains to be had for bold investors – if the UK and Europe follow the US in heading for the kind of soft economic landing that markets are starting to anticipate. The price-to-earnings ratios of big banks are far below other stocks. BNP Paribas SA, one of the best valued, trades at 6.8-times forecast 2023 earnings, according to Bloomberg data; Barclays Plc and Deutsche Bank AG are both at less than 5. The Stoxx Europe 600 index has a P/E ratio of 12.4. Across the sector, price-to-earnings multiples are about half that for the market as a whole, according to UBS Group AG analysts.