Sberbank: highest shareholder return

Emerging markets muscle in on bank sector

Emerging markets companies such as Lenovo and Infosys will soon be joined by new world players in the financial sector. A global report on the banking industry from Boston Consulting Group (BCG) reveals that financial institutions from the BRIC countries are now world players.

by Boston Consulting Group
Last Updated: 23 Jul 2013

Three of the world's 10 largest banks are Chinese, each with a market capitalisation of more than $100 billion. ICBC is number two on the list after raising $21.9 billion through an IPO last year. Bank of China, which also went public last year, is sixth, and China Construction Bank, seventh.

The report also found that the banks had become very competitive, yielding much higher returns for their investors than their western counterparts. Russia's Sberbank currently boasts a five-year shareholder return of 12.9% per year (adjusted for risk and local market influence), the highest of any bank featuring in the report.

Tjun Tang, one of the authors and a BCG partner, predicts that BRIC-country banking revenues will increase by an average of 8% (on an inflation-adjusted basis) per year until 2015. However, he also warned that "developing markets are more volatile, and if confidence goes down, valuations can change very quickly".

Bigger, Better Banking is BCG's fifth annual study of the shareholder value creation in the banking industry globally.

Bigger, Better Banking
Boston Consulting Group
Review by Emilie Filou

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