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About the Finance and Banking Industry

The global banking industry has been hit hard in recent years due to the maelstrom of the crisis that affected all financial industries in recent years. The global banking industry did recover in 2010, with revenues increasing markedly and profits also growing in proportion. In 2010, the global banking market generated revenues of around $3.8 trillion, with global banking profits hitting over $700 billion. Notably, revenues from banks in emerging markets grew strongly, with revenues up nearly 20% in India, 18% in Brazil and 14% in China.

However, there came a crisis in the global banking industry in the summer of 2011. The share prices of banks were falling and a number of indicators indicated little confidence in the prospects of the global banking industry. A typical indicator is the level of cross-border capital flows, which declined significantly after the 2008 crisis and havent really recovered.

The sovereign risk crisis will intensify these challenges, presenting many banks with higher funding costs and hindering access to wholesale funding markets. Banks domiciled in countries with low credit ratings may struggle to compete across borders and will be more vulnerable to attack from foreign competitors with lower funding costs.

Once the crisis settles, global banks will be left with a number of ongoing issues. After the banking crisis, regulation will undoubtedly affect profitability and will have a secondary affect of making financial products more expensive to the banks' customers. Banks will also experience a tightening of capital and funding, a problem caused by investment and credit demand from emerging markets. Asian banks are likely to achieve 10% revenue growth over the next ten years, so those that can tap these markets will have a competitive advantage. Furthermore, the growing adoption of online banking will mean fewer high streetbranches but deliver a much better customer experience.

Leading Global Banks (by assets)

1. BNP Paribas SA
2. Deutsche Bank AG
3. Barclays Bank PLC
4. Japan Post Bank Co Ltd
5. Crédit Agricole SA
6. Industrial & Commercial Bank of China Limited
7. The Royal Bank of Scotland plc
8. The Bank of Tokyo-Mitsubishi UFJ Ltd
9. China Construction Bank Corporation
10. JPMorgan Chase Bank