zeb/market flash (Issue 4 – January 2013)

zeb.market.flash provides an overview of the performance of the world’s largest banks (measured by market capitalisation). The relevant factors are briefly and concisely described, analysed and classified by our experts. For our analyses, we take a close look at relevant indicators for the valuation of the capital market, such as stock returns, as well as macroeconomic and bank-specific drivers. This issue (Q4 2012) deals with the impact of negative interest rates 2012.  What’s in it for you?

Global economic climate

  • Aside from the US, the global economy continues to slow down, as GDP growth rates and forecasts further decrease
  • Economic outlook for Germany substantially reduced
  • Italy may become main challenge for the euro in 2013 due to elections and highest refinancing needs

Key banking drivers

  • Stock market volatilities back to pre-debt-crisis levels
  • Historically low EURIBOR not reflected in lending/deposit rates
  • Investment banking activities with solid recovery – corporate bond issuances outperform M&A activities and equity offerings

State of the banking industry

  • Q4 strong quarter for banking industry outperforming all other industries – upward trend continues as market capitalization reached highest level in two years
  • Outlook for 2013 mixed due to increased rating downgrades

Special topic: The impact of negative interest rates

  • Negative interest rates pose several challenges for banks

Picture: Skyline Chicago

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