a new trend line for global banking.pdf
TRANSCRIPT
After climbing for 30 years, the share of
economic activity attributable to bank
revenues1 fell in the wake of the global
financial crisis. Looking forward, reve-
nues could flatline at about 5 percent of
GDP through 2020 (exhibit). In fact,
that’s our base scenario for the global
banking industry—one that implies
growth at the same rate as nominal GDP,
following the pattern of other industries.
In developed markets, factors contributing
to this trajectory include deleveraging
and stiffer regulatory regimes that will
require higher bank-capital ratios. In
many emerging markets, banking pene-
tration is relatively low (less than
4 percent in India, Mexico, Nigeria, and
Russia, for example). In others, it
is falling—in China, from 6.2 percent to
5.3 percent, we estimate, mostly as a
result of credit liberalization, which will
go on dampening margins. These forces
are unlikely to be counterbalanced by
the positive impact of outliers such as
Brazil (where banking penetration is more
than 10 percent), global infrastructure-
spending growth, or the emergence of
a new class of borrower in developing
nations. If interest rates in developed mar-
kets rose faster than anticipated, or if
an unexpected burst of product and ser-
vice innovation took hold, though, the
industry’s growth could become stronger.
Miklos Dietz, Philipp Härle, and Tamas Nagy
A new trend line
for global banking
Miklos Dietz is a principal in McKinsey’s
Budapest office, where Tamas Nagy is
a consultant; Philipp Härle is a director in
the London office.
1 Bank revenues, as we use the term, refers to total
bank-sector revenue pools (after risk costs).
This includes all of a given country’s or region’s
customer-driven revenues—for instance, those
from all loans extended, deposits raised, trading
conducted, and payments or assets managed. For a
more complete discussion of this research, see
The triple transformation: Achieving a sustainable
business model , October 2012, mckinsey.com.
M A Y 2 0 1 3
F I N A N C I A L S E R V I C E S P R A C T I C E
Revenues could flatline at about 5 percent of GDP through 2020, though innovation
might make growth stronger.
2
Banking’s growth as a share of global economic activity may
be leveling off.
Size of global banking revenues (after cost of risk) as % of nominal GDP
Source: Organisation for Economic Co-operation and Development (OECD); McKinsey analysis
1980
0
1
2
3
4
5
6
1990
1987 Black Monday
(global stock-market crash)
1994 Mexico
financial crisis
1997 Southeast
Asia financial crisis
Forecast
2000 2010 2020
2000 dot-com
bubble and bust
2008 global
financial crisis
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