Skip to main content Skip to Footer

Managing capital in the quest for profitable growth

Accenture has conducted an analysis of current capital usage and growth potential in each key APAC banking market, and scored banks accordingly.

Overview

Since 2008, and in the face of challenging market conditions, banks in the Asia Pacific region have had to adjust to a subdued growth environment.

To achieve future growth within the capital constraints of key markets across the region, banks must:

  • Know how to capture these opportunities

  • Know where profitable growth opportunities exist

To help banks navigate the journey, Accenture has developed the "APAC Banking Navigator model: a framework for balancing growth and capital constraints". This benchmarking tool compares APAC banking markets to illustrate capital usage and highlight growth potential across the region.

Background

Banks across the APAC region have seen their profitability fall. A principal driver of this fall has been the increase of risk and capital constraints.

Although APAC banks have progressively rebuilt their return on equity performance since 2009, they appear to be following a slow recovery path despite operating in a lower risk environment and having robust fundamentals.

Analysis
Accenture has conducted an analysis of current capital usage and growth potential in each key APAC banking market, and scored banks accordingly.

First, a "Growth" score, which measures a country and bank's overall growth prospects. And second, a "Capital" score, which measures banks' capital constraints, taking into account both their business and funding models.

Understanding the current capital usage and business growth potential is critical for banks to achieve sustainable growth.

Recommendations

Our “APAC Banking Navigator model” highlights the capital constraints and growth potential in banking markets throughout the region - these call for different strategic responses from banks.

However, irrespective of the particular conditions that apply, all APAC banks need to prepare for the journey ahead by assessing their current capital management capabilities, prioritizing opportunities for sustainable growth and identifying the execution capabilities needed to deliver these opportunities.