CNBC·2025-10-19 05:21Core Insights - European banks are facing significant credit concerns as earnings season begins, with heavy losses reported across the sector [1][4] - Major U.S. financial leaders have issued stark warnings about the private credit market, indicating potential risks that could affect European banks [2][4] Earnings Season Overview - The earnings season in Europe will be led by major banks such as Unicredit, Barclays, Lloyds Banking Group, and Natwest [3] - Analysts expect a shift in focus from macroeconomic risks to microeconomic risks during earnings calls, particularly regarding credit quality [4] Credit Quality Concerns - There are worries about the credit quality of corporate and small-to-medium-sized company loan books, with potential impacts from trade tariffs being underestimated [4] - Despite the concerns, some analysts do not foresee a material deterioration in credit quality in the third-quarter results [4] Specific Bank Updates - Unicredit is expected to report subdued third-quarter results due to narrowing net interest margins and higher funding costs [5] - Lloyds Banking Group has announced a £1.95 billion hit to its balance sheet due to a regulatory ruling on mis-sold car finance loans, which could offset strong quarterly performance [6]