Advisors at the American consulting firm McKinsey warned in the annual state of the industry report that the profit growth of global banks in the past two years may eventually prove to be short-lived, and it is expected that falling interest rates and sluggish demand for loans will act as resistance. McKinsey said that the return on tangible equity of about 1,700 listed depository institutions last year was 11.7%, confirming that the past two years were “the best two years for the banking industry since before the global financial crisis began.” According to the report, in some cases, banks must cut costs at five times the normal annual rate if they want to maintain recent profitability, and this is an arduous task for an industry where it has always been difficult to effectively increase productivity.

Advisors at the American consulting firm McKinsey warned in the annual state of the industry report that the profit growth of global banks in the past two years may eventually prove to be short-lived, and it is expected that falling interest rates and sluggish demand for loans will act as resistance. McKinsey said that the return on tangible equity of about 1,700 listed depository institutions last year was 11.7%, confirming that the past two years were “the best two years for the banking industry since before the global financial crisis began.” According to the report, in some cases, banks must cut costs at five times the normal annual rate if they want to maintain recent profitability, and this is an arduous task for an industry where it has always been difficult to effectively increase productivity.