The Zhitong Finance App learned that the Boston Consulting Group (BCG) said in a report on Monday that if global banks take major measures to promote growth and increase productivity, their valuation will increase by a total of 7 trillion US dollars over the next five years.
BCG wrote in the report that if banks can overcome difficulties to pursue growth and increase their net market ratio, then their current valuation can roughly double.
According to the BGC, the biggest cause of current pessimism about the banking industry is a sharp decline in its profitability.
According to reports, in 2022, about 75% of banks have a net share ratio of less than 1, and the price-earnings ratio is almost half of the 2008 level. Meanwhile, since the crisis, bank stock returns to shareholders have lagged behind major market indices, and this gap is still widening.
BCG said that even if banks invest in productivity and fundamentally simplify their operations, banks' profit levels will still be under pressure in the face of higher capital requirements and increased competition from new market participants such as fintech.
“Banks are unlikely to return to pre-global financial crisis profit and valuation levels.” According to BCG.