01 Oct 2021
Posted in Business Fundamentals
Top 25 global banks’ market values stabilized in Q3 2021, says GlobalData
GlobalData has named the top 25 banks by market capitalization in Q3 2021. As part of its research, the leading data and analytics company noted that the aggregate market capitalization of these banks remained stable at $3.9 trillion in *Q3 2021, with 14 players reporting growth over the previous quarter.
Parth Vala, Company Profiles Analyst at GlobalData, comments: “The most impressive performers in GlobalData’s ranking of the top 25 banks by market capitalization were Sberbank and Al Rajhi Banking, which reported quarter-on-quarter (q-o-q) growth of over 10% each in their market values.”
Sberbank’s share price reached RUB339.14 in Q3 2021, up from RUB305.55 in Q2 2021. This growth was fueled by its impressive Q2 2021 performance, which saw its profitability jump to RUB325bn ($4.5bn) – an increase of around 7% from Q1 2021. This is even more impressive when you compare with its Q2 2020 profits, clocking a 95% growth YoY.
Vala continues: “Along with impressive financial performance, the bank’s success can be attributed to its foray into a multicategory marketplace, with the launch of SberMegaMarket, and the expansion of its online streaming services. Banks are increasingly seeking new revenue streams as traditional avenues are becoming less profitable. Sberbank is looking to become the ‘Russian Amazon’, and is leveraging its market reach to create what is almost a monopoly in retail banking.”
Meanwhile, Al Rajhi Banking’s increased profitability was supported by a substantial increase in its net financing and investment income, as well as the implementation of fees for its banking services and exchange income.
Vala adds: “Al Rajhi Banking continued to report impressive performance. The bank saw net profits of SAR3.6bn ($1bn), and its profits increased by 8.1% verses Q1 2021. When comparing YoY, the bank saw a 48% rise from Q2 2020.”
The company that saw the biggest drop in market capitalization quarter-on-quarter (q-o-q) was HSBC, which saw a decline of 9.3% as the bank’s revenue continued to decline.
Vala continues: “HSBC’s revenue has declined by around 4% q-o-q to $12.6bn from $13.1bn in Q1 2021. Lower global interest rates affected its deposit business in the wealth and personal banking segment, and its global liquidity and cash management business in the commercial banking and global banking and markets segments.”
Another point of note from GlobalData’s ranking is that all of the top five Chinese banks continued to report a decline in their combined market value, which fell by around 6% q-o-q. China’s central bank has requested that the top banks curb their loan growth for the remainder of 2021 and maintain it at the same level of the previous year to restrict bubble risk, which occurred at elevated levels in the initial months of 2021.
Vala adds: “Although the commercial profitability of Chinese banks grew by 11.1% year-on-year to CNY1.1 trillion in the first half 2021, higher loan loss provisions and lower loan rates could continue to restrict profitability. On top of this, Evergrande’s financial fallout also has put stress on the banking and property stocks.”
*September 30, 2021