The banks have put up with the corona pandemic better than expected a year ago.

This is the conclusion reached by the consultants at McKinsey in their current banking study, which will be published this Thursday and which was available to the FAZ in advance.

A year ago the consultants assumed a wave of insolvency with high credit losses and a need for provision in the trillions of dollars. So far, their fears have not materialized.

Because the world economy has developed better, and credit losses are therefore lower than in the forecasts a year ago.

Markus Frühauf

Editor in business.

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The McKinsey consultants are now anticipating a recovery of the banks with rising returns on equity by 2025. But according to Max Flötotto, Senior Partner and responsible for banks in Germany, the global banking landscape is increasingly divided into winners and losers.

According to McKinsey calculations, the financial sector has gained $ 1.9 trillion in market capitalization on the stock exchanges since the beginning of the pandemic.

According to the study, more than half of this was accounted for by new financial technology companies in the payment transaction sector, as well as stock exchanges and some securities firms.

"Universal bank under pressure"

In the future, the wheat will be separated from the chaff even more clearly.

The McKinsey consultants expect that only a tenth of the institutes can book the entire profits of the industry for themselves.

Classic banks will find it increasingly difficult to convince investors of themselves.

"The universal bank model is under pressure," says Flötotto in an interview with the FAZ. There are few examples that are very successful.

The vast majority have either achieved minor gains or lost value since 2010.

"You need courageous and rapid growth steps in order to be able to keep up in the long term," recommends Flötotto.

“The industry winners show that it is possible.

They combine a digital customer experience, embedded financial services, lean processes and a focus on continuous innovation, ”adds the McKinsey consultant.

Classic model is replaced by a new one

Specialized financial service providers, especially in payment transactions, could have shown very high growth recently, which is also reflected in the ratings.

But here, too, it can be observed that these specialists supplemented their offerings with classic banking products from a certain point on.

“It is possible that the classic universal bank will be replaced by a new model that uses the existing customer base, goes beyond the traditional banking offering and increases income through additional services,” expects Flötotto.

Many of the young attackers, i.e. the fintechs, are still a long way from being profitable. The specialization initially pays off because the attackers are focusing on one topic and have a high level of innovation here. "But at some point the step from a pure focus on customer growth to profitability must follow."

According to Flötotto, the effects of the corona crisis on German bank balance sheets have so far been less severe than feared a year ago. In his opinion, German institutes still have a lot of catching up to do in an international comparison. This can be seen in the low market values ​​of Deutsche Bank and Commerzbank, which currently come to 23 and 8 billion euros respectively. In comparison, the major American bank JP Morgan has a market capitalization of 414 billion euros.

In the summer, McKinsey attested that the German banks had high potential for recovery (FAZ of July 20).

The institutes could significantly improve their profitability if they were ready to embark on an “ambitious renewal course”.

The consultants understand this to mean quicker strategic responses to ever more rapidly changing competitive conditions, customer requirements and technologies.

New earnings ratio

Because the earnings ratio in the banking business has changed significantly, says Flötotto.

Classic interest income has lost its weight, while transaction income, consumer loans or financial advice are becoming increasingly important.

“As the banking landscape is increasingly divided into winners and losers, consolidation among banks will accelerate significantly in the years to come.

That demands courageous action and clear strategic steps from management, ”he says.

According to McKinsey consultants, weaker institutes can catch up, but time is of the essence.

Two thirds of the value generated during an entire business cycle, such as market capitalization, would be created in the first two years after a crisis.