zeb/market flash (Issue 9 – April 2014) Global banking industry with a groggy start in 2014—BRICS even destroying value

Key topics

1. State of the banking industry

  • Market capitalization of global banking industry almost unchanged
  • US banks strengthened leading position regarding valuation
  • BRICS institutions with negative TSR performance, increased CDS spreads and rating downgrades (e.g. uncertainty about Crimea crisis in Russia)

2. Key banking drivers

  • Western European economic recovery continued in Q4 2013, but rising concerns about possible deflation
  • German and US long-term yields decreased in Q1 2014, leading to flatter yield curves and reduced maturity transformation
  • Major Western European banks reported low results for Q4 2013

3. Special topic: Asset Quality Review (AQR) challenges largest European institutions

  • AQR as core element of the ECB‘s comprehensive assessment running since end of February
  • Capital gap expected only for few institutions by most market participants
  • Not fully disclosed framework for stress testing causes high uncertainty

Picture: Skyline Shanghai

Download zeb/market flash (Issue 9 – April 2014)

Don't miss a trend with BankingHub!

Get informed by our experts about what is important—every 2 weeks directly into your inbox.
Author Dr. Dirk Holländer

Dr. Dirk Holländer

Senior Partner Office Frankfurt

Volker Abel

Senior Manager zeb Frankfurt
Author Dr. Ekkehardt Bauer

Dr. Ekkehardt Bauer

Senior Manager Office Münster

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletter

Get informed by our experts about what is important—every 2 weeks directly into your inbox.