The coronavirus pandemic has had a huge impact on the banking system, wiping out billions of dollars in profit and market cap of even the largest financial institutions.
According to data gathered by BuyShares, the combined market capitalization of the world’s five leading banks dropped by $393.9bn from December 2019 to April 2020. As the largest financial institution in the world, the US megabank JP Morgan Chase has taken the hardest hit, with the market cap decreasing by $128.71bn in four months.
Three Largest US Banks Lost $345.3bn in Market Cap
JP Morgan’s quarterly earnings hit a record high at the end of the last year, driven by the bond trading revenue, which surged 86% to $3.4bn value. The investment banking revenues were also booming in the fourth quarter, increasing more than 30% year-on-year.
In December 2019, the market capitalization of the US megabank reached $437.2bn, revealed Statista data. However, with financial markets tanking and merger and acquisition drying up in the first months of 2020, this value dropped to $356.9bn by the end of February. The coronavirus outbreak brought a new hit, causing the market cap of the largest bank in the world to plunge to $274.28bn in March. Although April brought a recovery with the market cap rising to $308.49bn, statistics indicate this value still represents a $48bn plunge compared to December figures.
As the second-largest bank globally, Bank of America has also witnessed a significant drop in the market cap in the last few months. In December 2019, the US multinational investment bank saw its market cap reaching $316.8bn value. By the end of the first quarter of 2020, this figure dropped to $185.23bn, a 40% plunge in three months. Statistics show that by the end of April, the market cap value slightly recovered and reached $208.65.
Wells Fargo lost $108.5bn in market cap in four months, falling from $227.5bn in December 2019 to $119bn in April 2020. Statista data revealed that the combined market cap of the three largest banks in the United States dropped by $345.3bn during this period.
Market Cap of Leading Chinese Banks Dropped by $48.6bn
Statistics show that the market capitalization of the Industrial and Commercial Bank of China (ICBC), as the third-largest financial institution globally, dropped by $30.47bn, falling from $267.3bn in December 2019 to $236.83bn in April 2020.
As the second-largest bank in the country and the fifth-largest globally, China Construction Bank has also witnessed a drop in the market cap value. In December 2019, the Chinese financial corporation reached $216.26bn in market capitalization. By the end of January 2020, this figure fell to $188.88bn. However, the last few months have witnessed a recovery with the market cap reaching $198.13bn in April. Statistics show that the two largest Chinese banks lost $48.6bn in combined market capitalization between December 2019 and April 2020.