Banks worldwide lose $5.5 trillion in value

20 February 2009

Bankers worldwide have eroded the value of their organisations globally by a whopping $5.5 trillion since the beginning of the financial crisis, which is as much as 10 per cent of world's GDP.

These figures were revealed today by Researchers from the Boston Consulting Group, who said that the environment will be more difficult and challenging for financial institutions and this will continue for a considerable period of time.

BCG researchers said that the market value of the banking industry fell drastically by more than 50 per cent from a high of $8.8 trillion in the third quarter of 2007 to $4 trillion by the end of 2008 and to make matters worse, it fell by another $700 billion in the first three weeks of this year itself.

The only four major banks to survive the crisis and retain market values greater than $100 billion at the end of 2008 compared to 11 a year ago,  are China Construction Bank, Industrial and Commercial Bank of China, UK's HSBC and the US bank JPMorgan Chase.

The research also said that 30 of the largest banks in the world had lost their market value by 47 per cent in 2008 from $3.2 trillion in 2007 to $1.7 trillion in 2008.

The two Chinese banks came first and second while JPMorgan Chase moved to third in the global rankings while HSBC was fourth.