In der diesjährigen Ausgabe, unter dem Titel „Mis-allocated Resources: Why Banks Need to Optimise Now” kommen die Autoren zu dem Schluss, dass in einigen Geschäftsfeldern weiterhin ein Überangebot besteht und die Banken dringend ausstehende Reformen zu Ende bringen müssen. Das Corporate & Investment Banking weist noch immer ein enormes Potential zur Restrukturierung auf, um sich an das neue Marktumfeld anzupassen und Erträge zu steigern.
How Will Investment Banks Fare?
To succeed banks could significantly increase return on equity by making tighter portfolio decisions, trading off leverage, risk capital, funding constraints and focusing on where they have a competitive edge.
1What is this year’s report about?
It’s about the misallocation of resource relative to client demand. When we researched this report we spoke to a number of senior people at large investors and corporate clients of banks and found that there are significant areas of both under provision and over provision. That means that there are businesses within banks which are overinvested in and which clients are not willing to pay for. A lot of the time these are a hangover from previous strategies which are no longer sustainable.
2We’ve heard a lot about change in banking in recent years. How do the numbers stack up so far?
Our report finds that during the last three years about USD15BN of costs (10% of total costs for the industry globally) in banking and about USD1.5TN of risk-weighted assets (about 40% of the total) have been pulled out. This has mainly been achieved through moving legacy assets or whole businesses to non-core areas. Now banks need to organize their core businesses. For example,duplicative infrastructure in “run the bank” technology, ties up USD20BN for the industry.
3What are the main concerns of investors and clients?
More than two thirds of the investors we spoke to expected trading volumes to increase. However, banks’ customers’ buying patterns are shifting, which means the benefits banks provide to clients also need to change. So there are now new areas of growth, such as multi-asset investing. Also, the top concern for the investors we spoke to was the lack of liquidity in the credit market – that is, money to invest in bonds. Finally, the most striking finding was that investors are actively seeking to consolidate their spend with banks and reduce the number of banks they work with.
4How can banks provide clients what they want and compete with each other at the same time?
The industry is in a phase of low growth compared to before the financial crisis. To be profitable, they can’t afford to waste and sit back. Innovation and competing in the major – and relevant – growth areas will be critical if banks want to outperform their rivals. Our report finds that restructuring, multi-asset investing, corporate finance and a focus on the Financial Institutions Group are areas of potential revenue growth. Those segments could add USD20-25BN in new revenues.