Winning Countries and Territories

Most of the major global banks have successfully weathered the geopolitical and economic challenges of 2022. These included Russia’s invasion of Ukraine and subsequent international sanctions, rising energy and food prices, as well as the negative impact of the stronger US dollar on the economy and inflationary pressures that prompted central banks to push through a series of rapid rate hikes.

Initially, banks used higher base rates, which increased margins and generated higher revenues. As they have continued to reduce costs, largely due to the increased efficiencies resulting from the digital transformation of internal processes and customer relationships, their profitability has exploded. In fact, many of our winning banks posted record results over the past year and rewarded investors with increased share buybacks and dividend payments.

They have also invested in a sustainable future. In their companies, they achieve this primarily by driving the further digitization of processes, products and services and, if necessary, by using advanced technologies such as artificial intelligence and quantum computing. Likewise, more and more banks are migrating their internal processes from existing on-premise solutions to cloud-based solutions.

But many leading banks have also stepped up their efforts to ensure a more sustainable future for society and the planet. In 2022, they have expanded the choice and breadth of their sustainable offerings for investors while accelerating the alignment of their portfolios with globally recognized environmental, social and governance sustainability goals.

At the same time, most of the big banks continued to build up their capital buffers. improving credit quality; the proportion of non-performing loans has decreased; and liquidity and capital ratios were generally strengthened. However, the recent turmoil in some specific sectors of the industry has prompted a bank run and raised broader questions about the role and viability of the global bank.

Financial regulators and central banks acted immediately to stem the panic by offering guarantees to uninsured depositors, opening liquidity windows and forcing bank mergers at breakneck speed. However, these methods have raised questions about the moral hazard and assumed seniority of bondholders and stockholders.More importantly, all of this has raised the question of whether regulators will impose stricter and more comprehensive stress tests on banks, as well as higher capital and liquidity requirements. In addition, mutual banking systems should be strengthened to protect vulnerable banks and their depositors.