Namely, the total market value of the top 25 global banks continued to fall in Q3 2022 after dropping 14.4% in the previous quarter. This time around, the total value of global banks fell by 6.7% in combined market value to $3 billion, according to GlobalData research, released on October 19. Company Profiles Analyst at GlobalData, Murthy Grandhi, commented on the changes in the top 25 bank rankings after the market cap correction:
The big three
ICICI Bank (NSE: ICICIBANK) has seen the largest rally in market cap price, a 17.2% increase, thanks to a growth in loan book and improved asset quality, which combined for a stronger bottom line for the bank. Its earnings report beat market expectations by posting revenues of INR 178.8 billion (~$2.18 billion). Bank Central Asia (IDX: BBCA) saw the second largest gain, with a 15% price appreciation in part thanks to the lifting of Covid restrictions in parts of China and in part thanks to an improved asset mix and growth in current and savings accounts quarter-by-quarter. Charles Schwab’s (NYSE: SCHW) market cap jumped by 13.8%, the third highest on the list, pushed by solid Q2 2022 earnings results. Interest revenue jumped by 31% following higher market interest rates and an improvement in interest-earning assets.
Chinese banks
Issues in the Chinese property markets eroded business confidence pushing the market cap of ICBC, Bank of China, Agricultural Bank of China, and China Construction Bank by more than 10%. Regulators in China cut interest rates a few times in 2022 to push out more loans in order to kick-start the ailing property sector; these moves could impact bank profitability in the long run. Furthermore, the chance of a negative cascading effect caused by a possible implosion of Credit Suisse was mentioned by Grandhi, which could spell trouble for banks. He also added: Finally, the possibility of a worldwide recession due to an increase in interest rates could be another negative for bank earnings going forward. Buy stocks now with Interactive Brokers – the most advanced investment platform Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
