Global Banking Pulse: Reviewing the performance of the largest banks in H1 2024

Alvarez & Marsal’s Global Banking Pulse for H1 2024, analyses performance for the top 35 global banks, including 25 headquartered in Europe and 11 in North America.

The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

It compares key performance metrics across: Growth, revenue, efficiency, resilience, and market value creation. 

Market share 

Whilst European banks hold 61 per cent of the total assets, North American banks dominate the market capitalisation with 64 per cent of the total market cap, highlighting a disparity in market valuations between the two regions, explained by structural market power, scale, and regulatory differences. 

Performance metrics

  1. Growth: North American banks, particularly those in Canada, have shown stronger growth in their Loans & Advances portfolios compared to their European counterparts (+2.3 per cent vs +0.5 per cent). This trend potentially reflects more favourable credit market opportunities in North America. However, European banks have also demonstrated higher growth in customer deposits (+2.7 per cent vs +1.3 per cent), possibly indicating a different strategic focus.
  2. Revenue and efficiency: North American banks lead in revenue generation, driven by a higher net interest margin (1.8 per cent vs 1.2 per cent), whilst European banks excel in operational efficiency, with lower cost-to-income ratios (55 per cent vs 61 per cent). This divergence highlights the varying business models and operational focuses across the regions.
  3. Resilience: Regarding credit risk, European banks exhibit a lower cost of risk (0.16 per cent vs 0.31 per cent), but higher non-performing loan levels compared to North American banks (2.2 per cent vs 0.6 per cent). Despite these challenges, European banks are in a stronger position regarding capital (36.4 per cent vs 30.4 per cent minimum requirement for own funds and eligible liabilities/total total loss-absorbing capacity) and liquidity resilience (155 per cent vs 120 per cent liquidity coverage ratio), with lower risk density compared to their North American counterparts.
  4. Market value creation: North American banks operate on a different level compared to their European peers, with higher return on equity (11.9 per cent vs 11.3 per cent) and Return on Assets (0.93 per cent vs 0.64 per cent). This higher profitability is accompanied by lower capital levels, as reflected in the substantial difference in CET1 headroom (4.1 per cent vs 1.5 per cent) between the two regions.

Top performers 

The top performers in H1 2024 included one U.S. bank and four EU banks. These banks achieved strong market cap growth, with the top 11 banks seeing a 27 per cent increase, while the bottom 11 had a modest 16 per cent growth. 

Conclusion

Alvarez & Marsal’s Global Banking Pulse Report reveals how individual banks rank against each other and underscores the importance of adapting to regional market conditions, and highlights the diverse strategies employed by banks to achieve growth, efficiency, and resilience. 

To read our topline findings, read the Executive Summary report, or to access the full 80+ page in-depth analysis, or to discuss any of the findings, please contact us.