Banking and retail sectors see shifts in profitability and technology

European retail banking is experiencing a period of high profitability driven by interest margins, though structural shifts are looming. A PwC Strategy& study indicates that while operating results grew by 6 percent in 2025, much of this improvement stems from higher revenues rather than structural cost reductions. Banks face increasing pressure to use current surpluses to invest in digitalization and new business models to combat changing competition and technology.

In Germany, Deutsche Bank has reached a milestone in its technological transformation. The bank has selected Vault Core, a cloud-based platform from Thought Machine, to serve as the core banking system for its personal banking and wealth management sectors in Germany. This move aims to replace 15 fragmented legacy systems with two modern platforms to reduce complexity and improve product time-to-market.

In the United States, regional bank First Bancorp has seen significant stock growth following strong quarterly results. The bank benefited from higher interest rates and rising interest margins, reporting a substantial jump from a net loss in 2025 to a net profit of approximately 20.79 million USD in the second quarter of 2026. Meanwhile, Ulta Beauty shares faced downward pressure, trading significantly below analyst consensus targets and intrinsic valuation estimates.