Banks will sell EUR 3tn of non-core assets at below par prices over the
next two years to sturdier rivals or new entrants to the market, reports
Financial News Online, citing research by McKinsey. The research suggests
the banking industry faces years of uncertain returns, lower margins and
capital constraints. It said: "Thousands of branches and dozens of other
assets, such as structured finance businesses, are likely to be sold."
Banks which generate more than 60% of revenues from emerging markets are
likely to be the winners, according to McKinsey. Under one scenario run by
McKinsey – predicated on a prolonged global recession, slow growth and
moderate regulation – the "emerging market giants" are likely to enjoy a
return on equity in 2014 of about 18%. By contrast, US and European
universal banks would only make 15% RoE under the same conditions – well
down from their 20% pre-crisis levels. Overall, McKinsey envisages six
fundamental changes to the banking industry over the medium term:
Banking returns will be highly uncertain.
The range in banks' performance will widen, with significant variability
among banks with similar business models.
Margins will compress and return to their historical norms.
Banks in emerging markets will create most of the value in the industry.
Capital is likely to remain scarce.
Funding issues will persist for many banks, with scarcity and cost taking
a heavy toll on profits.
---
This e-mail may contain confidential and/or privileged information. If you
are not the intended recipient (or have received this e-mail in error)
please notify the sender immediately and destroy this e-mail. Any
unauthorized copying, disclosure or distribution of the material in this
e-mail is strictly forbidden.
Attachment(s) from Sameer Gogri
1 of 1 File(s)
No comments:
Post a Comment