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More than half of the world's banks do not need five recessions, analysts warn



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Most global banks are currently underfunded, McKinsey & Company first warns the bank about the state of the banking sector. The document published this week states that more than a decade from the recent economic crisis, banks still did not reach profitability, as they were in 2007.

Nearly 60 percent of them show faster growth than returns and originally said that economic slowdown can aggravate their problems. Especially if central banks reacted to the situation by lowering interest rates, which eliminates commercial banks' profits.

The European Central Bank, for example, in an attempt to revive the economy, once this policy for the past four years. Therefore, the question is how much room to kick the economy at a reduced rate to go to an institution. The latter alternatives are in a similar situation to disputed interest rates, which was first mentioned by a McKinsey analyst. They would lower their profits more to banks, because they would simply pay customers to borrow their pensions.

Banks' income and value fall

Most bank investments

  • Barclays
  • BNP Paribas
  • Citi
  • Credit Suisse
  • Deutsche Bank
  • Goldman Sachs
  • HSBC
  • Merrill Lynch
  • Morgan Stanley
  • Socit Gnrale
  • UBS

With an uncertain future, institutions are facing the global banking sector. During the first half of the year, the twelve largest European and US investment banks dropped to $ 76.8 billion, an 1

1% m / m. Based on data from the analytics platform Coalition, Reuters reported. Revenues from these financial and retail and consulting businesses have been the lowest since 2006.

The capital market has experienced a bleak situation. Since an election year was arrested, the average value of the banks has fallen by an average of 15 and 20 percent, a toughness primarily for McKinsey, who does not mention a particular institution. The downturn, according to the document, indicates that investors expect sharply reduced return on investment. Their pressure is particularly pronounced in Europe. The value of European banks' shares in Cadoron has fallen in double-digit rates since 2016, wrote the Financial Times. Barua claims that many of them will be hampered by a disaster if they do not make major structural changes. Initially, financial institutions should invest more in modern technology and maintain their competitiveness, for example by joining forces.

The Emergence of Technical Competition

We may be in the late phase of the business cycle. The banks now have to do their business because they are not in good shape, "says Bloomberg Kausik Rajgopal, he said of McKinsey employees.

Fintech

Market for Financial Technology. The concept is behind the various forms of innovation used to support and provide financial services.

As in other industries, the banking sector has experienced a significant rise in technology competition over the past decade. New games on the market are both fintech startups (in the Czech Republic, such as Twisto or Zonky projects), as well as giants Apple and Google, which are also tied to financial services.

Analza McKinsey bank risk of becoming a historian. Technology companies with their user-friendly products are three huge breeding consumers, with banks just one difficult step. Of their deviations between the IT budget, they invest an average of 35 percent, while in the field they often exceed 70 percent

In an attempt to stay on board, many financial houses are currently closing projects for various forms of cooperation. According to Kausik Rajgopal, the banks will get used to these partnerships.

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