LONDONFRANKFURT, March 13 Reuters A year ago Credit Suisse was teetering on the brink of collapse, a scare that sent European bank shares tumbling and the cost of insuring against default soaring.

Investors were sounding the alarm about the stability of lenders amid turmoil among regional U.S. banks.

UBS39;s stateorchestrated rescue of the stricken Swiss peer restored calm. European banks have since staged a striking if somewhat fragile recovery, posting record profits and enjoying doubledigit gains in their shares.

Below are graphics charting the road to recovery, as well as some potential pitfalls ahead.

STOCKS SOAR

European bank stocks dropped sharply in March last year Deutsche Bank shares were down more than a fifth for the month and the European banking index had its worst month since the pandemic.

Share prices have since rocketed, led by a 60 gain for UBS and nearly 70 for UniCredit. BNP Paribas and Deutsche Bank shares have underperformed but still gained.

The STOXX Europe 600 banks index has climbed for five straight months and is now at its highest since 2019.

INCOME BOOST

Fuelling the recovery has been the rebound in bank profitability, aided principally by higher interest rates that have swelled banks39; net interest income the difference in the money banks pay on deposits and earn on loans.

Banks including Santander, UniCredit and British banks like NatWest have all reported a jump in profits on the back of higher net interest income. Many have…