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Profitability
With the backdrop of the global economic position and, in particular, the situation in the Eurozone, only five of the banks recorded an increase in profits in 2011. A clear trend in the most successful banks this year was diversified portfolios, with banks operating in emerging markets and Asia faring well.
Costs
Cost reduction is one of the key objectives quoted by many of the banks. However, 10 of the banks saw an increase in their cost:income ratio in 2011. Total operating expenses increased for 10 of the banks
Return on equity
Return on equity (RoE) remains a key performance indicator for banks and an important measure for shareholders. Since the financial crisis, RoE ratios1 have reduced significantly for all the banks. |
Derivative assets
Across the banks, derivative assets grew by 31%, partially due to increased trading volumes, but mainly because of increases in mark to market values. As expected, the biggest derivative portfolios continue to be held by the large investment banks.
1Comparison of published RoE ratios is difficult because of the different calculation bases used by the banks. Therefore, a common calculation (profit after tax divided by average accounting equity) has been used in our analysis.