Sun, Mar 29, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

GABV study reveals significant differences between the financial performance of banks

Thursday, October 10, 2013
Opalesque Industry Update - An updated study comparing key financial information about the world’s biggest banks, or Global Systemically Important Financial Institutions (GSIFIs), and a group of leading sustainable banks has shown significant differences.

The results show:

Sustainable banks lend almost twice as much of their assets on their balance sheet, when compared with the big banks (75.9% compared to 40.1%, from 2003 to 2012) Sustainable banks rely on customer deposits to a much greater degree to fund their balance sheets (73.1% to 42.9%)

Sustainable banks maintained stronger capital positions, relative to their larger contemporary banks, especially when measured by equity/total assets (7.2% to 5.5%) Speaking at ‘A Better Future for Finance’, a special event at Georgetown University, Global Alliance for Banking on Values (GABV) Chair, Peter Blom, said the results show that sustainable banks lend more proportionally than the ‘too big to fail’ banks, benefit from funding that’s primarily drawn from customer deposits, and have a stronger capital base.

“We cannot afford to ignore the increasingly compelling business case for sustainable banking. It’s now clear that over the long-term values-based banks, that put people and the planet they depend on first, have proved to be more robust and resilient than the world’s biggest banks.

“The results matter because we need a stronger banking system to support a more resilient, modern economy. And we need it soon, so finance can play its role in helping to meet urgent and converging social, environmental and economic challenges. If we take the mounting evidence seriously, we have an unprecedented opportunity to build a more diverse, transparent and sustainable banking system in the interests of us all.”

The research was extended to include a comparison of the European banking market, with similar conclusions to the overall report. Sustainable banks in Europe showed higher levels of lending to the real economy, compared to GSIFIs, stronger levels of equity capital, and better returns on assets.

Leading CEOs from the Global Alliance of Banking on Values (GABV), including Tamara Vrooman, President and CEO of Canada’s largest community credit union, David Reiling, CEO of Minnesota’s Sunrise Banks, and John Fullerton, Founder and Director of the Capital Institute, a collaborative working to transform finance to serve a fairer more sustainable economic system, used the Georgetown University event to describe what a banking landscape made up of banks that balance people, planet and prosperity would look like.

The GABV is an independent and growing network of 25 of the world’s pioneering sustainable banks, from Asia, Africa, North and South America, Europe and Australia. The network’s members have combined assets of over $70 billion, serving millions of customers around the world.

press release

bc

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. M&A - Hedge funds no longer attractive targets for banks, reinsurers, Blackstone buys stake in Christopher Pucillo’s Solus event-driven hedge fund[more]

    Hedge funds no longer attractive targets for banks, reinsurers From Institutionalinvestor.com: Swiss RE, the world’s second-largest reinsurer, is looking to sell its 15 percent stake in Jersey, Channel Islands–based hedge fund firm Brevan Howard Asset Management. Morgan Stanley reported

  4. Opalesque Radio: Threadneedle expects continuing equity volatility this year[more]

    Benedicte Gravrand, Opalesque Geneva: Investors should expect more volatility, which is signaling a "slow moving" top to the market, KKM Financial’s founder and CEO Jeff Kilburg told CNBC on Monday. And this volatility is going

  5. Hedge funds show strong performance of 2.52% so far in 2015[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry got off to a strong start in 2015 "completely unmindful" of the poor performance last year, according to data provider Preqin. According to Preqin, following a year which saw the average he

 

banner