THE BANK CRISIS FINANCIAL RATIOS: A comparative research of the UK and Sweden during 2006-2010
Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
The credit crunch that started the 9th of August 2007 is generally viewed as the most significant crisis to affect the financial markets and the global economy since the 1930s.The UK financial sector was heavily hit by the crisis which resulted in a dry up in lending and left a black hole in the British banks‟ finances. During the last quarter of 2010 the GDP shank unexpectedly with 0.5 percent from the third quarter which created concerns about going back into the recession. Contrarily, for Swedish economy 2010 was an impressing year with an unexpected GDP growth of 7, 3 percent in the last quarter.The purpose of this study is to analyse how the finance crisis has affected the leading banks‟ performance within the two countries and see whether the differences in values can explain the difference in GDP growth during the last quarter of 2010. The analyse is performed through a financial ratio analysis of the different banks.The final results of the research indicates to that the Swedish banks have been more profitable, have had a more secure and higher quality of lending and more capacity to lower cost related to income than the British banks. The more distinctive negative influence is mostly based on the larger amount of credit losses the British banks had to experience which contributed to their significant decrease in earnings per share which created scepticism on the credit market followed by a severe slowdown in consumption and in GDP growth. Since the credit losses never got to same levels in Sweden as in the UK the scepticism of the Swedish banking system did not affect the reduction in credit use and house prises to the same extent and GDP growth could recover back to normal levels sooner than in the UK.
Place, publisher, year, edition, pages
2011. , 70 p.
credit crunch, finance crisis, financial ratios, Basel, credit risk, credit loss ratio, cost income ratio, net interest margin, earnings per share, return on equity, capital adequacy
Finanskris, nyckeltalanalys, lönsamhet, likviditet, finansiell marknad, kreditrisk, kreditförluster, soliditetsmått, likviditetsmått, lönsamhetsmått, effektivitetsmått, kreditförlustnivå och kapitaltäckningsgrad, svenska banker, brittiska banker.
IdentifiersURN: urn:nbn:se:hh:diva-16409OAI: oai:DiVA.org:hh-16409DiVA: diva2:445993
Subject / course
UppsokSocial and Behavioural Science, Law