European banks showed signs of greater dynamism in the first quarter both in terms of revenues and profits, outperforming, on an aggregate level, the performance of US institutions which instead recorded more brilliant indicators in the last three years. This is what emerges from the survey on international banks conducted by the Mediobanca Studies Area, which analyzed the financial statements of the main institutions over the last decade.
In the first quarter of 2017, the revenues of European banks at the aggregate level grew by 4,1% against +3,9% in the USA, while the net result improved by 19,7% against +11,4%. Also losses on loans decreased more substantially on this side of the Atlantic (-17,9% to 7,7 billion euros against -12,3% to 6,8 billion). On an average level, the capital ratios of institutions from the Old Continent are higher: 13% the average Cet1 in March 2017 against 11,5% for American groups.
The indication relating to the first quarter is in contrast with the general scenario emerging from the Europe-USA comparison over the last three years and in 2016. Last year, European institutions reduced their net income by 32% compared to 2015 ( despite greater effectiveness in cost containment) and reduced revenues (-6,2%), while the US ones recorded approximately +24% in profits and +1,7% in revenues.
Furthermore, the survey shows that major balance sheet cleanups by European banks led to extraordinary charges of around €144 billion in the period 2011-16 with over €106 billion paid to settle disputes and €151 billion in write-downs to which they were offset by capital gains of 121 billion.
The negative impact of these extraordinary items was much more limited for US banking institutions which recorded a negative balance of 34,7 billion euro on an aggregate level. The budget cleaning continued in 2016, reports the study, and primarily involved RBS (-7,9 billion in extraordinary charges), HSBC (-4,7 billion), Unicredit (-3,5 billion) and Deutsche Bank (-3,3 billion), while Intesa Sanpaolo was the best among the main European groups with a positive impact of 1,4 billion euro.
