R&S, a study and research company owned by Mediobanca, presented its analysis on the 2012 aggregate accounts of international banks, painting a portrait that shows the decline of European banks compared to the previous year, and the widening of the gap between the institutions of the Old Continent and those of the United States.
Revenues, as far as European banks are concerned, have suffered a decrease of 9,2% at constant exchange rates on an annual basis, combined with a very sharp fall in the interest margin (-6,8%), commissions (-3,9%) and above all "other revenues" (-43,1%, ). The savings on structural costs (-1,9%) were offset by the higher losses on loans (+12,8%) which, after the drop in 2011, return to the levels of 2010 (about 90 billion euro). Credit losses are equal to 19,5% of revenues.
The recurrent result (the one "before" the extraordinary items) collapses by halving (-49%) and it is only thanks to the lower severity of extraordinary charges (down by 75%) and lower taxes (-16%) that the net result drops "only" by 41%. In 2012, the European banking system widened its gap with respect to pre-crisis margins: in the period 2001-2007 the current result was on average 28% of revenues, it fell to 20% in 2011 and then to 11,2% in 2012. The net result is 4% of revenues, before the crisis European banks made profits on average equal to 21% of revenues.
The performance of the banks in the USA is very different. In 2012 revenues decreased by 0,9% on an annual basis. In comparison with Europe, the decline in the interest margin (-2,7%) and net commissions (-1,5%) was also milder. Structure costs are holding up (+0,6%), but there has been a significant reduction in loan losses (-26,7%) which bring them to a third of 2010 levels (from 93 to 32 billion USD) and represent 8,4% of revenues.
This is precisely the element that allowed the current result of US banks to grow by 7,5% and net profit by 9%, bringing roe to 7,5%, four times that of Europe and above its own 2010 levels (6,4%). However, even the major US banks remain below pre-crisis levels, having recorded an average value of current income in the period 2001-2007 equal to 32% of revenues against 25% in 2012.
The direct cost of the crisis, looking only at extraordinary charges, was for European banks equal to almost 100 billion. euros in the two-year period 2011-2012, of which 78 billion for write-downs and impairment (at least 15 billion relating to Greek sovereign debt alone) and 21 billion. from compensation, fines, indemnities and other prudential provisions. In the United States, the cost was more contained, estimated at about 47 billion USD, of which 32,5 billion relating to disputes and "litigation" and 10,5 billion to write-downs and impairment and other charges for 4,3 billion.
The bank debt of the major European institutions is equal to over 15.400 billion euros, i.e. 1,7 times the public debt of the states where the institutions are based. In Switzerland, bank debt (made up of deposits, bonds and interbank debt) is even 10 times that of the state (1.026%).
In Italy, however, the bank debt is equal to 59% of the public one (24% for Intesa Sanpaolo and 35% for UniCredit) and weighs 19 euros on every citizen, more than the 17 euros in Germany, where bank debts account for 66% of public debts. In Europe, about 43 euros of bank debt weighs on each citizen against 26 of public debt.
The trend in the United States is quite the opposite, where every citizen is burdened by 53 dollars of public debt against approximately 22 of bank debt.
