The future is bright for the world’s banks

Article Excerpt

The global banking industry attracted most of the blame for the 2008/2009 financial crisis. (Canadian banks were one notable exception.) Under pressure from shareholders and regulators, banks have spent the past decade rebuilding their balance sheets, reducing costs and returning to their core lending business. A recovery is underway Much tighter government regulations, increased compliance costs and persistent low interest rates kept the recovery modest for a number of years. According to the consulting firm McKinsey & Co., global banks collectively increased their revenues by 5.8% annually between 2010 and 2016. Return on equity (a measure of profitability) also increased steadily from a low of 4.9% in 2008 to 8.6% in 2016. Given the slow recovery for banks (here again Canada is an exception), it’s no surprise that their shares have lagged behind overall market gains since the end of the global financial crisis. However, over the past two years, global banks have deepened their gains, beating the overall markets. Banks in emerging market lead with…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.