European banking stocks face challenges as the boost from higher interest rates fades, and recession risks increase. The dividend yield for European banks is nearly 8%, making them cheaper than during the 2008 financial crisis. Concerns about potential bad debts and the impact of high interest rates are causing banking shares to suffer. While banks' profits are currently high, uncertainties around economic growth could keep valuations low until risks become more apparent. Analyst estimates show European bank profits growing around 25% in 2023 and 6% in 2024, outperforming other sectors.