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2024/10/21 10:40:22

Banks in the world

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Chronicle

2023: The total revenue of banks in the world for the year reached $7 trillion

At the end of 2023, the revenue of public banks reached $7 trillion. The net profit of credit institutions whose securities are traded on exchanges amounted to $1.15 trillion, which is 8% more compared to the result for 2022. According to this indicator, the banking industry became the leader - it accounted for 24% of the profits of all public companies in the world. For comparison, net profit in the energy sector, which took second place, is estimated at $663 billion. Such data are given in a study by McKinsey & Company, the results of which were published on October 17, 2024.

2022 and 2023 were the best for the banking sector since the global financial crisis of 2007-2009, the report said. Liquidity also rose. The loan-to-deposit ratio was 77.2% in 2023, rising from 75.5% in 2022, although both are below the 2011-2021-year average of 78.5%.

However, according to analysts at McKinsey & Company, the results shown are not enough to convince markets of the long-term health of the industry. The banking industry is in last place in terms of average multiplier P/B (share price to book value) - 0.9x. Among all industries, the median value is 2.7x. Banks are also showing mixed results in terms of productivity growth and are facing increased competition for profitable lines of business.

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Despite the fact that globally banks spend about $600 billion on technologies that should increase productivity, efficiency in some large markets, for example, in the United States, on the contrary, is declining, says McKinsey & Company.
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Experts believe that some of the urgent problems will help solve the means of artificial intelligence. However, as of 2024, "it's too early to talk about it."[1]

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