Is Banking Business Changing? Some Evidence
This chapter is an analysis of the banking business and is intended to provide supporting evidence on the main issues addressed in the previous chapters.
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6.1
Introduction
This chapter is an analysis of the banking business and is intended to provide supporting evidence on the main issues addressed in the previous chapters. To this end, it first presents some results from a survey of major international banks in three international macro-areas: Europe, the USA and Japan (Sect. 6.2). Such results highlight the trend of the main balance sheet items and help understand the health status of intermediaries, working on scenarios with different contingent and structural characteristics. The purpose is to derive ideas for outlining the prospects of banking operations on a global scale, with particular attention on the European market. The final goal is to understand the intensity and extent of changes in recent years (reflected in bank balance sheets) which affect the shape currently taken by banking business and the shape it will probably take in future. Next, the chapter focuses on lending and provides insights on the main traits of credit risk management implemented in a sample of banking groups operating in Italy (Sect. 6.3). © The Author(s) 2016 P. Ferretti, New Perspectives on the Bank-Firm Relationship, Palgrave Macmillan Studies in Banking and Financial Institutions, DOI 10.1007/978-3-319-40331-1_6
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New Perspectives on the Bank-Firm Relationship
Finally, the chapter describes the experience of two Italian banking groups with reference to their offer to enterprises and related key features (Sect. 6.4). Section 6.5 draws conclusions.
6.2
An Overview on an International Scale
A recent survey by Mediobanca (MBRES 2015) investigated the balance sheets from a sample of 60 large banking groups (32 European, 15 Japanese and 13 US) for the decade 2004–13. It provides, among others, some interesting insights into profitability and capitalization. The study describes the main results related to the European setting, and compares them to the US and Japanese settings, highlighting for each European result the most significant deviations from the USA and Japan. Starting from profitability for the period 2004–11, the European banks showed an average annual growth rate of revenues equal to 4.3 per cent (USA 2.2 and Japan 0.4 per cent), mainly owing to the increase in net interest income and to a lesser extent to that of net commissions. Turning to 2012–13, the values change significantly for European banks, which recorded a decrease of approximately 10 per cent, due to contractions of both net interest income and fees. Conversely, US banks in the same period showed a limited growth (0.4 per cent) and Japanese banks reported a 3.7 per cent increase. Regarding the ratio of revenues to total assets, the average for European banks amounted to 2 per cent, against 4.7 per cent of US banks and 1.4 per cent of the Japanese ones. For all three macro-areas, banks have total asset increases higher than revenues, highlighting that in the longterm dimensional growth has not been accompanied by a corresponding increase in revenue. The comparison between the values of return on in
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