Banks in emerging nations, such as Brazil and India, will by 2050 earn bigger profits from domestic banking than their counterparts in the world's richest countries, according to a report from PricewaterhouseCoopers (PcW).
"Total profits from domestic banking in the E7 (unofficial grouping of emerging countries) could be around half those in the G7 by 2025 and larger than in the G7 before 2050," PwC said. The E7 nations comprise: Brazil, China, India, Indonesia, Mexico, Russia and Turkey. The group of G7 nations comprises Britain, Canada, France, Germany, Italy, Japan and the United States.
The report, "Banking in 2050: How big will the emerging markets get?", suggests that total domestic credit in China could overtake Britain and Germany by 2010, Japan by 2025 and the U.S. before 2050.
"India could also rise from relatively low levels today to emerge as the third largest domestic banking market in the world by 2040 and, in the long run, could grow faster than China," it added.
Nick Page, a partner at PcW, said the E7 banking markets were fast becoming more important in the global banking sector. "Institutions that do not develop strong positions in these markets will find it difficult to maintain the same growth rates of assets and profits as those that do," he said in comments accompanying the report.
Copyright Agence France-Presse, 2007