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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