8 commercial banking 2 Flashcards
ČSOB key indicators
- profitability
- liquidity
- capital
- impairments
- cost efficiency
TOP 10 global banks in 2014
- ICBC - industrial and comercial bank of China
- China construction bank
- Agricultural bank of China
- Bank of China
- Wells Fargo & Co
- JP Morgan Chase & Co
- HSBC Holdings
- Citigroup
- Mitsubishi UFJ Financial Group
- Bank of America
TOP Czech banks in 2014
- ČS
- KB
- ČSOB
4.UniCredit Czech Rep.+Slovakia - GE Money Bank
- Raiffeisen Bank
Comparison of the Euro area, US and Japan
- number of banks - USA
- total assets - EU
- assets - EU
- regulatory capital USA
- tier 1 capital - USA
- liquid asset ratio - USA
- population - USA
Which banks were profitable in 2008 and 2009?
Czech
Resilient Czech banking sector
▪ Deposits exceed loans by 30%, highest value in EU
▪ Very low share of FX loans in corporate sector (18%), almost no FX loans drawn by households
▪ No need to help banks with liquidity, no loans from international institutions needed
The shifting balance of money and information yesterday in contrast to today
- early 90s to mid 00s
-money: high risk-free rates, low recent losses, high leverage
-information: high cost, low coverage, easy decisions - today
-money: low risk-free rates, high recent losses, low leverage
-information: low cost, high coverage, hard decisions
World´s unbanked adult population (2010)
2.5bn
1. China 957
2. India 395
3. Indonesia 97
4. Pakistan 87
5. Brazil 77
6. Bangladesh 68
7. Nigeria 67
8. Mexico 54
9. Vietnam 42
10. Philippines 40
banking sector evolution
- wholesale beginnings (Nigeria, Egypt)
- retail growth (India, China, Indonesia, Brasil, Mexico)
- maturation (Turkey, Russia, Spain, Malaysia, CZ)
- complexity (France, Japan, US, UK)
Six factors of long-term future of banking
1) The end of declining interest rates
2) Consumer deleveraging
3) Increasingly active regulation
4) Aging populations
5) The end of credit risk-free sovereign borrowers
6) Diverging growth rates between developed and emerging markets
Consumer deleveraging
▪ Banks generate earnings from their balance sheets in three main ways:
1) Gathering inexpensive deposit liabilities
2) Originating, servicing and holding or selling debt assets
3) Taking interest rate risk through asset and liability maturity mismatches
▪ The profitability of these activities depends, to a large extent, on a number of structural factors beyond banks’ direct control:
1) The regulatory regime,
2) The level of competition
3) The macroeconomic environment.
▪ Declines in asset values have exacerbated the problem with leverage. In the pre-crisis boom, appreciating assets allowed borrowers to add debt without increasing leverage. Post-crisis, the situation is reversed.
▪ Through the crisis and attendant recession the main assets of most consumers – namely, their houses and financial asset portfolios – have lost value.
