The market capitalization of the top banks worldwide is yet to recover to pre-pandemic levels.
According to the research data analyzed and published by Comprar Acciones, the top 25 banks globally shed a collective $0.1 trillion in market cap during Q3 2020. From $2.7 trillion in Q2 2020, it dropped to $2.6 trillion in Q3 2020, a 3.7% drop.
While most business segments have been seesawing since the start of 2020, Equity Capital Markets (ECM) have thrived throughout. According to a study by Refinitive, global ECM activity shot up by 59% in the first nine months of 2020 to reach $750.7 billion.
Bank of America’s ECM Revenue Surges 147% YoY in Q3 2020
The top bank by market capitalization during Q3 2020 was JP Morgan Chase. It grew by 2.4% quarter-over-quarter (QoQ) to a market cap of $293.4 billion.
On the other hand, Charles Schwab had the highest growth of 7.5% to $46.7 billion. This growth moved it up by eight spots from #31 to #23.
China Construction Bank had the highest drop of 19.2% to $180.8 billion, moving from rank #3 to rank #4. Itau Unibanco, PT Bank Central Asia dropped out of the top 25 list with declines of 37.6%, 9.4% and 8.3%, respectively. In addition to Charles Schwab, PNC Financial and Qatar National Bank replaced the three dropouts.
For the top US banks, revenue from ECM drove performance. Bank of America posted a 147% increase in equity underwriting fees. Goldman Sachs had a 134% year-over-year (YoY) rise in ECM revenue. According to Fitch Ratings, ECM revenue at the top 5 US banks shot up by 63% to $44.9 billion.
During Q2 2020, global ECM issuance surged by 78% to hit a five-year high. The figure more than doubled from $104 billion in Q1 2020 to $260 billion in Q2 2020. According to Refinitiv, the performance carried into Q3 2020 with US issuance up 61% in the first nine months of 2020. Asia-Pacific saw a 71% increase while in Europe, the Middle East and Africa (EMEA), there was a 56% spike.