The total market capitalization of the world’s top 25 global banks surged to $3.3 trn, according to London-based research firm GlobalData.
The results pertain to market capitalization of the world’s leading banks as of the second quarter of 2023. It represents a 3.8 percent surge on a quarter-on-quarter (QoQ) basis, suggesting potential recovery in the financial sector.
US-based JPMorgan Chase secured the top spot with a market capitalization of $425 bn as of June 2023. This represents an impressive 10.8 percent rise from its previous quarter’s performance.
Following closely behind were the Industrial and Commercial Bank of China Limited and Bank of America. They ranked second and third, respectively, with market caps of $239.4 bn (+1.8 percent) and $228.6 bn (-0.1 percent).
Meanwhile, Mitsubishi UFJ and HSBC Holdings emerged as the bank with the highest percentage rise in market capitalization.
The Tokyo-based bank witnessed a remarkable 15.1 percent increase in QoQ, reaching $93.3 bn. On the other hand, HSBC experienced a significant gain of 14.3 percent QoQ, with its market capitalization soaring to $155.4 bn.
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Saudi’s Al Rajhi among top banks
According to GlobalData’s research, the only bank from the Middle East and North Africa region was Saudi Arabia’s Al Rajhi Banking & Investment Corp.
However, Al Rajhi witnessed a slight decline of 0.6 percent QoQ, resulting in its market capitalization shrinking to $77.8 bn.
Still, it remains among the top 25 banks in the world with the biggest market capitalization. In addition, Al Rajhi managed to record a 13 percent growth in its earnings per share (EPS) over the past five years. This substantial EPS growth aligns closely with the average annual increase of 16 percent in the company’s share price.
Market sentiments
“The US Federal Reserve’s decision to pause the interest rate hike in June was seen by investors as a sign that the central bank is not as concerned about inflation as it was previously,” said Murthy Grandhi, company profiles analyst at GlobalData.
“This, along with signs of US inflation cooling, a brighter outlook for the Eurozone economy, and China’s stronger-than-expected economic recovery, boosted investor sentiment,” he added.
Grandhi concludes that there is a possibility of a modest recovery in the global banking sector in the upcoming quarters.
He noted that, “Contributing factors include a potential pause in interest rate hikes by policymakers and a smaller-than-expected expansion of net interest margins. Additionally, lower volumes of lending and credit transactions are anticipated due to tighter credit conditions.”
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