The wholesale banking sector is proving to be a major bright spot in the banking industry even as consumer banking continues to lose its sheen, according to Massachusetts-based TowerGroup, a financial services research and advisory services firm.
TowerGroup reports that transaction services businesses of leading global banks averaged 22% annual revenue growth in 2008, whereas it was 11% for wholesale banking. Though growth rates have begun to decline in 2009, these businesses continue to generate a significant portion of the profitability of commercial banks globally.
Theodore Iacobuzio, Research Executive for Payments and Wholesale Banking, at TowerGroup, said: “Bank executives must determine how to guide their institutions through the deteriorating economic circumstances of this recession while also focusing on how to build their businesses for the new financial landscape that will follow. The reliability of the wholesale banking sector provides a critical business engine for stable revenue growth, an engine that will help drive institutions in the post-recessionary era, creating even greater business opportunities in the years to come.”
