insto - Australian financial markets

The global banking industry has recovered half of the market cap lost since the pre-crisis peak of $US9.7 trillion in October 07, reports Boston Consulting Group. Market cap has doubled in the past seven months from a low of $US3.1 trillion in February 09 to $US6.2 trillion at the end of September 09.

In other words, the banking sector’s TSR improved by more than 100 percentage points from 2008. (Total shareholder return – or TSR – is the metric preferred by BCG for measuring company performance. In broad terms, TSR consists of capital gains and free-cash-flow yields.) This makes the sector one of the success stories of 2009:

Fig 1: Total shareholder return, 1 Q1–Q3 2009 (%)

Sources: Thomson Reuters Datastream; BCG analysis.
Note: All TSRs were calculated after conversion to US dollars.