Banks in the world

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.

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.

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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