Of Special Interest


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14th August 2020

Global banking market capitalisation slumps by over 30% amid pandemic says Buyshares research

Data presented by Buy Shares indicates that the market capitalisation of the global banking market dropped by 30.32%. The drop was recorded between Q4 2019 and Q2 2020.

According to the data, the market cap during the last quarter of 2019 was $8.97tr while during Q2 2020, the figure stood at $6.25tr.
The biggest plunge in the market capitalisation was recorded in the middle of the coronavirus pandemic between Q4 2019 and Q1 2020 at 91.3%. Notably, the market cap recorded in Q1 2020 at $5.78tr was lowest since Q1 2016.
Elsewhere, the highest cap was registered during Q4 2017 at $9.32tr.

The pandemic has impacted most lending facilities' profitability especially with many bad loans being written off. According to the Buy Shares report "Despite mitigation measures in place, the pandemic has raised the credit risk for most banks. The economic uncertainty resulting from the health crisis has a meaningful impact on the real economy, and a slump in economic activity raises banks' loan losses."

The research also overviewed the top and lowest Total Shareholder Return(TSR) performance among Western European banks as of April 2020 to June 2020.
The data shows that Dutch-based ING GROEP had the highest returns at 29.6%. Only five top Western European banks had positive returns.
Meanwhile, HSBC Holdings had the worst returns at -16.7% while Standard Chartered registered returns of -1.3%.
Detail at: https://buyshares.co.nz/2020/08/13/global-banking-market-capitalization-slumps-by-over-30-amid-pandemic/