The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

The future of banking: Why banks need to shape up or sell off

Before the September crisis, many banks were looking to sell non-core assets to raise capital. Now, safety in size means mergers are the order of the day. But when the market settles, will investors demand that banks concentrate on what they are good at to maximise returns?

Special focus: Banking 2008 and beyond

Bank valuations are at 10-year lows, while capital injections from private equity firms and sovereign wealth funds are drying up. In order to shore up balance sheets and return shareholder value, will they be forced to sell the crown jewels, or should they change their business models? Helen Avery reports.


IN A SURVEY by Allen and Overy of chief executives of FTSE 350 and Fortune 500 companies in the summer of 2007, 21% of financial firms said they expected demerger activity in their sector before the end of June this year. Only in the technology, media and telecoms sector did chief executives foresee greater demerger activity. Demergers seemed the likely route as large financial conglomerates were faced with having to improve their balance sheets. A decade of merger activity had led to inefficiencies at the firms, and streamlining to unlock value seemed certain. Buyers were thought to be plentiful – those that survived the sub-prime storm undamaged would be keen to seize opportunities for cheap acquisitions.

Yet the wait for demergers continues. Bank stocks have plummeted. Keefe, Bruyette Woods’ large-cap bank index was down more than 33% over the 12-month period up to August 15.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree