Key Topics
I. State of the banking industry
- The Brexit decision on June 23rd discontinued the positive trend of the first two months of the second quarter in 2016
- While banks from BRICS and the US showed a positive TSR, European banks ended Q2 with a loss of
8.2% on average
II. Economic environment and key banking drivers
- Persistent low inflation rates and economic uncertainty support the low interest rate policy—money and capital market rates decreased further
- The Brexit decision shows its first impact leading to a decline of the British pound
- Reported figures from Western Europe and BRICS banks showed solid profitability in the first quarter of the year, while US banks reported decreasing results for the fourth time in a row but still remain on a higher level than European banks
III. Brexit consequences for the European banking industry
- The Brexit decision caught the capital markets on the wrong foot—European banks were hit hard
- Global and large European banks have to deal with market uncertainty and essential issues regarding fundamental changes of legal entity structures and the operating model
