Banks in the U.S. thrived amid the virus nightmare, in contrast to the failures of the banking industry during the financial crisis.
Not only did the banks weather the storm, they played a prominent role in the economic recovery. In the U.S., for example, the banks distributed the PPP loans the federal government provided for small businesses. Their trading businesses and dealmaking advisory groups fueled their earnings, while their reserves ballooned.
“It's almost been a year where the banks, many of which underperformed last crisis, overperformed this crisis,” Compton adds. “They were the dogs of the last crisis and now they've shined through this crisis.”Outside of the U.S. and China, France’s BNP Paribas was the top European bank and lands at No. 30 on the Global 2000 list, up 12 slots from 2020. Other countries with banks in the top 100 include Canada’s RBC, and the U.K.’s HSBC. The largest Russian bank, Sberbank Russia, made a quantum leap from No. 402 last year to No. 51 in 2021. Mitsubishi Financial Group
was the largest Japanese bank at No. 52. In total, There are 289 banks on the 2021 Global 2000 list.Forbescompiles our Global 2000 list using data from FactSet Research to screen for the biggest public companies in four metrics: sales, profits, assets and market value. Our market value calculation is as of April 16, 2021, closing prices and includes all common shares outstanding. headtopics.com
James Shanahan, a senior equity research analyst at Edward Jones, noted that wealth management and capital markets were the strongest business lines for the big banks. He recalled that in the second quarter of 2020 the banks benefited from significant corporate debt and equity issuance that generated a lot of fee income. The big banks with high-performing fee oriented businesses were able to manage slowing loan growth, declining loan balances, and overall pressure on net interest margins.
“The banks that did particularly well during the pandemic were JPMorgan, Morgan StanleyMSand Bank of America. Banks like that had significant capital markets franchises and were benefiting from strong institutional securities trading and investment banking activities, including underwriting debt, equities and securities,” Shanahan says.
JPMorgan chief Jamie Dimon recently took a victory lap after the bank’s stock price nearly doubled to $160 since hitting a low of $83.50 a year ago at the nadir of the Covid-19 sell off.“Within days of realizing that Covid-19 was a global pandemic that would virtually close down large parts of the world’s economies, the U.S. government moved with unprecedented speed,” Dimon wrote in his annual letter to shareholders. “Fortunately, banks were part of the solution– unlike in the Great Recession. And unlike the Great Recession, the U.S. economy was actually in good shape going into the Covid-19 recession.”
I'm a wealth management staff writer at Forbes based in New York. Prior to joining Forbes, I was on the same beat for Private Asset Management. I also covered public… Read MoreI'm a wealth management staff writer at Forbes based in New York. Prior to joining Forbes, I was on the same beat for Private Asset Management. I also covered public policy and compliance for Compliance Reporter and the auto industry for the New York Daily News. A lifelong New Yorker, I got my M.A. from the Craig Newmark Graduate School of Journalism at the City University of New York. Email thoughts and tips to JBisnoff@Forbes.com. Follow me on Twitter at @JBisnoff. headtopics.com
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