The Fight for the Customer
mckinsey_global_banking_annual_review_2015
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8<br />
<strong>The</strong> <strong>Fight</strong> <strong>for</strong> <strong>the</strong> <strong>Customer</strong>: McKinsey Global Banking Annual Review 2015<br />
Exhibit 1<br />
<strong>The</strong> global<br />
banking industry<br />
produced record<br />
after-tax profits<br />
of $1 trillion<br />
in 2014<br />
Global banking profits after tax 1<br />
$ billions<br />
1,030<br />
973<br />
120<br />
888<br />
881<br />
95 23<br />
24<br />
67<br />
794 25<br />
759 232<br />
202 213<br />
105<br />
694<br />
673<br />
675 21<br />
29<br />
198<br />
196<br />
170 21 195<br />
143 200<br />
14<br />
16 173<br />
25<br />
257 262<br />
478<br />
148<br />
224<br />
139<br />
64<br />
165<br />
141 158<br />
36 43<br />
183<br />
13<br />
75<br />
138<br />
112<br />
272 278<br />
310<br />
288<br />
262<br />
172<br />
175<br />
251<br />
90 112<br />
30<br />
21<br />
28 35<br />
85<br />
46 34 54<br />
75 72 80<br />
32 52<br />
67<br />
24 35 38<br />
28<br />
44 43 49<br />
2005<br />
2006<br />
2007 2008 2009<br />
2010<br />
2011<br />
2012<br />
2013<br />
2014<br />
CAGR,<br />
(2005-2014)<br />
Percent<br />
-3.9<br />
4.0<br />
4.9<br />
24.8<br />
0.7<br />
13.1<br />
9.9<br />
Western Europe<br />
Eastern Europe<br />
Asia (ex-China)<br />
China<br />
North America<br />
Latin America<br />
Middle East &<br />
Africa<br />
1<br />
Total profit pools of all customer-driven banking activities, including retail and institutional asset management<br />
Source: McKinsey Panorama – Global Banking Pools<br />
1<br />
In this report, “<strong>the</strong> banking industry”<br />
includes deposit-taking and lending<br />
institutions and o<strong>the</strong>r banks whose<br />
business is concentrated in<br />
investment management, servicing<br />
and processing. It does not include<br />
pure asset or wealth managers, or<br />
insurance companies.<br />
<strong>The</strong> new reality<br />
In one important way, 2014 was an exceptional<br />
year <strong>for</strong> <strong>the</strong> global banking<br />
After-tax profit hit an all-time<br />
record of $1 trillion, driven mainly<br />
by growth in China.<br />
industry. 1 After-tax profit hit an all-time<br />
record of $1 trillion, driven mainly by<br />
growth in China. That per<strong>for</strong>mance continued<br />
<strong>the</strong> gradual recovery from <strong>the</strong> financial<br />
crisis and <strong>for</strong> <strong>the</strong> second<br />
consecutive year surpassed <strong>the</strong> peak<br />
reached in 2007. It also continued ano<strong>the</strong>r<br />
streak: banking profits continue to<br />
top those of any o<strong>the</strong>r global industry.<br />
Exhibit 1 shows some remarkable<br />
changes in banking profits. China’s<br />
growth has been spectacular; profits have<br />
quintupled since 2007 (but now seem to<br />
be rapidly slowing). Latin America has<br />
also shown stellar growth. North America<br />
has recovered nicely from <strong>the</strong> financial crisis.<br />
<strong>The</strong> Middle East and Africa have<br />
grown steadily, although not as quickly as<br />
many observers expected. Eastern Europe<br />
peaked in 2007 and has never recovered;<br />
political upheaval on its borders<br />
has stalled growth in recent years. Western<br />
Europe also peaked in 2007, and
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