Key themes from Q2 2014 earnings calls
In the Q2 2014, the global banking industry continued to operate against a challenging backdrop characterized by weak economic trends, low activity levels and elevated geopolitical, regulatory and conduct risks. The headwinds have made it difficult for banks to grow revenues, reduce stubbornly high expenses and generate acceptable returns.
Reflecting the expectation that many of these challenges will persist, Toronto-Dominion Bank CEO Ed Clark said, "We do not see anything in our results to date which would suggest that our fundamental operating environment has improved."
Key trends for the quarter included the following:
- US economic recovery continued at an uneven pace.
- European management commented on signs of positive, though weak, growth.
- Geopolitical tensions have heightened risks for several European banks.
- Japan’s GDP fell in Q2, driven by a sales tax increase.
- Requirements for capital buffers and leverage ratios have not been finalized, leading to considerable uncertainty around compliance.
- Despite the resolution of several high-profile legacy issues, global banks remain highly vulnerable to legal and conduct-related risks.
(For more information about Q2 2014 earnings calls and the top 10 themes, download the full report.)
Top 10 themes: 2Q14 earnings season×
Note: The themes shaded in yellow are new to the list this quarter; the themes shaded in dark gray dropped out of the top 10.