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Banks face two more years of famine

Low interest rates, slack economic growth and a demand to hold higher capital ratios is hitting the profitability of banks

It's come to this: All six of the biggest US banks traded on Wednesday for less than their book value, or net worth.

This unusual state of affairs essentially means investors believe the banking industry's behemoths-Bank of America, JP Morgan, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley-are either undercapitalised or will destroy value because they won't generate returns that exceed their cost of capital.

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