Lloyds Banking Group PLC (LSE:LLOY) is a 'top pick" with Jefferies even though it is one of only a handful of European banks that missed targets recently.
Of the 30 banks analysed, five missed headline revenue forecasts, including Lloyds.
Analysts at Jefferies believe the main driver of the positive results for European banks in comparison to consensus was revenues, which were 3% above expectations.
Costs were also “well contained”, generally beating consensus by 2%, Jefferies said.
As a result, the third quarter of 2022 meant European banks delivered their ninth quarter of outperforming consensus in a row.
Despite the results, the economic backdrop is still a drag for share prices.
Lloyds, for example, is down 11% in the year so far to 43.9p.