zeb.market.flash (Issue 13 – April 2015) Western European banks’ strong performance driven by ECB—US and BRICS banks destroying value

KEY TOPICS

1. State of the banking industry

  • Global banking industry with moderate TSR performance in Q1 2015 (3.1%)—still top performer on a year-over-year basis
  • Western European banks heavily benefiting from ECB’s quantitative easing
  • CDS spreads for BRICS banks decreased slightly due to calming of markets in Russia – but negative outlook for profitability

2. Key banking drivers

  • BRICS GDP growth under pressure – drop by 1pp expected for Q1 15 and forecast adjusted downwards
  • Western Europe and US with inflation rates slightly above zero and partially negative for Q1 2015
  • ECB’s quantitative easing further decreases yield curves in Germany

3. Special topic: The power of central banks

  • ECB and SNB with historic decisions driving European markets
  • Besides direct effects, banks have to tackle with uncertain second-round effects

Picture: Skyline San Francisco

Download zeb.market.flash – issue 13

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