Friday, 14 June 2024

Despite challenges, many globally important banks are well positioned to thrive

5 min read

New York, October 04, 2021 - A group of 30 global systematically important banks, so-called G-SIBs, continue to have inherent strengths which have armed them against the adverse effects of the COVID-19 pandemic. For some of these banks, according to a new report from Moody's Investors Service, these strengths will allow them to exit the pandemic in a stronger competitive position. 

"While profitability varies across the group, diversification and scale of many G-SIBs should drive superior profitability again in 2022, and support through-the-cycle performance," according to Moody's Senior Vice President Peter Nerby.

The Moody's report describes the rising threats from technology firms and shadow banks to the G-SIBs' core deposit-taking, payment and lending services. It highlights, for example, the increasingly difficult and costly effort to recruit and retain staff and build a collaborative, innovative, client-centered culture given shifting workplace preferences and competition for skills by these challengers. 

However, according to Nerby, "This group of banks have formidable defenses in the form of brand, trust, regulatory economies of scale and investable earnings." Read more.

Re-disseminated by The Asian Banker

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