In the last five years, $800 billion in value has shifted between 'bad' and 'good' performance segments in the $4,300 billion global financial services industry according to Oliver, Wyman & Co.'s Shareholder Performance Index (SPI). Good segments, according to the New York-based firm, include specialist providers, such as Charles Schwab, as well as geographic stars like Australia. Conversely, 'bad' segments include Japan and the universal banking sector.The top-five performing U.S.-based large-cap financial services companies in 2001 were: AIG, Citigroup, Fifth Third Bancorp, Northern Trust Corp., and Marsh and McLennan.
Adjusted for volatility of returns, Commonwealth Bank of Australia reported total shareholder return of 423% over the past five years, according to the report. During the same period, Citigroup's total shareholder return was 426%, while AIG's return was 394%.
"Comparing some of the highest ranking institutions, such as Commonwealth Bank of Australia, Citigroup or Danske Bank, we see that each achieved its success through understanding customers better," states Nader Farahati, managing director of Oliver, Wyman & Co. "Uniquely in financial services, the value a customer generates depends on who the customer is and risks generated after the point of sale. This type of insight is important for institutions to understand when making strategic business decisions."
The report shows that Asia has suffered over the last five years. As Japan's macroeconomic woes are expected to continue, the only likely relief for the region could come from latent consumer demand and potential privatization in China. As for other emerging markets, Latin America has also under-performed.
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