zeb/market flash (Issue 6 – July 2013)

State of the banking industry

• In Q2 2013, US and Western European banks exhibited solid TSR performances fueled by promising P&L results in Q1 2013
• Investors, however, became cautious about BRICS and especially Chinese banks, leading to lower valuations and higher CDS spreads

Key banking drivers

• The recession in Western Europe continued with negative growth rates for the fourth quarter in a row
• Sovereign interest rates remained low but increased in Q2 2013 as the US Federal Reserve considered adopting an expansive monetary policy

Special topic: Generating value in banks while acting as a responsible citizen

• Double sustainability as a strategic chance for banks
• Social/ecological sustainability tends to push TSR performance of banks but financial sustainability is a clear pre-condition