This year has been rather kinder to banking markets than last, with stock market performances around the world looking up.
RBI highlighted 50 of the largest retail banking groups and all but 12 have reported an increase to their share price year-on-year.
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While this time last year only one bank was able to boast a double digit increase to its share price – this time around KBC is the only bank able to lay claim to a triple digit increase to its market value, a jump of 138%.
Belgium based bank KBC turned its performance around throughout this year after a disappointing 2011 left its market value down 62%.
Lloyds, Bank of America (BofA) and Société Générale have also bounced back from sub-standard results last year, going from the bottom of the table in 2011 to rank in the top 5 in 2012.
Rumours in November that Lloyds were considering selling its 60% stake in St James’s Place Wealth Management to raise around £1bn did not deter investors with Lloyds reporting a 71% rise in its share price year-on-year.
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By GlobalDataBofA, the largest bank in the US by assets, will cut around 16,000 jobs by the end of 2012 as revenue continues to decline because of new regulations and a slow economy. This will put a plan one year ahead of time to eliminate 30,000 jobs by 2014 and contributing to saving of $5bn per year.
BofA has fallen behind rivals in recovering from the financial crisis, largely due to mortgage-related losses. Although total revenue has declined for four straight quarters this hasn’t stopped BofA’s share price from rising over 80% year-on-year.
Commerzbank has also reported a better year than last, although it has not recovered as well as some, entering the table at 40th with no percentage change to its share price in 2012.
While this year has been good to many, some big lenders continue to suffer at the hands of the global recession.
ICICI shares fell by the same amount this year as 2011 (37%) and along with HSBC (down 21%) and UniCredit (down 19%) the three are the poorest performing of the 50 banks.
HSBC has continued to underperform its UK peers, partly due to recognition that its sales forecasts have been too high and partly due to outstanding US regulatory worries. The bank has also incurred a charge from the US authorities over money laundering, to the tune of $1bn.
HSBC has also had to absorb a $103m charge for card protection and identity protection miss-selling as well as multiple charges from countries where the bank has sold its operations.
Likewise, China’s biggest banks have had a poor year. Bank of China (down 3.4%), China Construction Bank (down 4.4%) and Industrial and Commercial Bank of China (down 7.1%) have all struggled as China’s growth continues to slow.
Being one of the better performing banks in 2011 has been no grantee of a good year in 2012 it seems with no bank that increased their share price in 2011 making it in to the top 25 in 2012.
American Express (AmEx) topped the table last year with a share price rise of 12% but this year have fallen to 25th, their share price up 17%.
Similarly, NAB who came in 2nd in 2011 with a share price increase of 5% has dived down the rankings to 39th and a fall in the share price increase of 3%.
