While total third-quarter
net earnings at 20 selected banking groups rose by almost $2.5
billion to $30 billion year-on-year, there was a marked geographic
bias – with the strongest performing banks based in the US, France
and China.
Strip out JPMorgan Chase’s sixfold rise of
more than $3 billion in net earnings for the quarter to $3.56
billion – driven by strong investment banking and asset management
figures but hammered by underperforming retail and card units – and
net earnings at 20 of the biggest banks to report third-quarter
results actually fell (some banks, including HSBC, Lloyds and
Standard Chartered, do not publish earnings for the Q3 period).
Go deeper with GlobalData
China’s banks had another solid
quarter: Industrial and Commercial Bank of China, Bank of
China and China Construction Bank saw net profits rise by
around 20 percent year-on-year, boosted by a lending boom in the
first half – although the rate of increase slowed slightly in the
third quarter.
In a generally positive assessment, China’s
banks said that net interest margins had stabilised and, looking
ahead, forecast that lending would remain buoyant into 2010.
India’s banks boasted perhaps the best
quarterly performance of any one country (see
separate article titled, Robust earnings drive India’s
ascent).
Among banks in Europe, Société Générale more
than doubled its quarterly earnings, easily beating analyst
forecasts, boosted by strong French retail banking revenue growth,
declining provisions and a sharper than expected cut in
expenses.
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By GlobalDataThough analysts said there remained some
pockets of concern, such as future loan losses in its consumer
finance arm and further deterioration of credit risk in its
operations in Russia and Romania, the cost of risk at group level
has stabilised at 120 basis points.
Santander’s quarterly earnings of €2.2 billion
($3.3 billion) was down by only 3 percent year-on-year, and in an
upbeat assessment, the bank reiterated its full year earnings
target of €9 billion.
At Barclays, although third-quarter net
earnings fell by more than 50 percent, largely on losses on the
value of its own debt and other one-off items, underlying earnings
for the first nine months of the year more than doubled.
In common with HSBC, which said only that its
underlying third-quarter profits were “significantly ahead” of a
year ago, Barclays indicated that bad debts may have peaked.
Among the more positive developments of the
reporting season was a sharper than forecast increase in underlying
banking earnings at ING (net earnings of €499 million compared with
a loss of €477 million in the year ago period), boosted by
lower-than-feared loan-loss charges, strong fees and commission
income, and lower costs, notably at ING Direct.
Credit losses peaked?
As for the fourth quarter, Bank of
America, which reported a net loss of $1 billion, indicated that
credit losses may have peaked, though its outgoing CEO, Kenneth
Lewis, told analysts results going forward “are expected to
continue to be challenging as we close the year”.
But the most marked uplift in sentiment for
the remainder of the year was expressed by HSBC’s chief executive,
Michael Geoghegan, who had expressed fears of a W-shaped double dip
recession earlier in the year.
Boosted by an improvement at its troubled US
consumer finance business, where bad debts fell for the first time
since 2006, he said: “the biggest jolt has now passed through the
global economy” and predicted a two-speed recovery, driven by
emerging markets.
|
RESULTS |
||
|
Q3 group net earnings at 20 |
||
|
Q309 ($bn) |
% change |
|
|
JPMorgan Chase |
3.56 |
571.6 |
|
Société Générale |
0.64 |
137.0 |
|
PNC |
0.56 |
115.3 |
|
Wells Fargo |
3.23 |
96.9 |
|
BNP Paribas |
1.95 |
44.4 |
|
Bank of China |
3.21 |
22.5 |
|
ICBC |
4.95 |
19.9 |
|
China Construction Bank |
4.44 |
18.7 |
|
US Bank |
0.61 |
3.4 |
|
Intesa Sanpaolo |
1.01 |
0.0 |
|
BBVA |
2.23 |
0.0 |
|
Santander |
3.23 |
-2.1 |
|
Crédit Agricole |
0.58 |
-7.9 |
|
UniCredit |
0.84 |
-19.2 |
|
Barclays |
1.80 |
-53.7 |
|
Erste |
0.34 |
-72.5 |
|
ING |
0.75 |
n/m |
|
Citigroup |
0.10 |
n/m |
|
Bank of America |
-1.00 |
n/m |
|
Royal Bank of Scotland |
-3.01 |
n/m |
|
n/m = not |
||
