Saturday, October 20, 2012

In the Wake of the Financial Crisis Pt. 2



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.


-------------------------------------------------------------------------------------------------------------


Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds. For more information, please click here or call 866-367-9110.




No comments:

Post a Comment