zeb/market flash (Issue 7 – October 2013)

State of the banking industry

• In Q3 2013, the global banking industry and especially Western European institutions achieved excellent TSR performances of nearly 15% /
• Again, BRICS financial institutions and commercial banks from growing markets lost some of their previously existing valuation edge

Key banking drivers

• Economic conditions improved in mature markets in Q2 2013 – growth in emerging markets stabilized / Low interest rate regime persists in Western Europe and the US – yield curves in BRICS countries flattening

Special topic: Separation of banks (“Liikanen report”) as strategic and operational challenge for European banks

• 37 of the 50 largest European banks hit by Liikanen proposals / The implementation of the Liikanen model would lead to an increased market share of European top players.