Last week, we looked at a few of the industries that were
victimized by the 2007-2009 financial crisis. Unfortunately, that trend is
continuing with a report this week from McKinsey, which revealed that banks continue
to struggle on a global scale.
McKinsey’s Toos Daruvala predicts a series of merges over
the coming years.
The challenges are so great, though, that the consultant expects a host of large and small U.S. banks over the next five years to throw in the towel and merge."You will see significant consolidation, particularly among banks with less diversified income streams that are highly dependent on net interest margins," Daruvala said. "They will be troubled and forced to sell."
But the news gets worse.
McKinsey’s data implies the end of a 30-year trend, in which
bank revenue has grown faster than GDP. "In both emerging and developed
markets, banking revenues are expected to flatline at around 5 percent of GDP
for the foreseeable future."
What does all of this mean? The crisis may be over, but the
effects of it will likely be felt for years to come. Next week, we’ll be
looking at two more bad omens in the McKinsey report.
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