Mike Mayo Expects This Decade The Worst US Banking Revenue Growth Since Great Depression

From the GREED & fear by Christopher Wood today:

Another sign of deflationary pressures is the ongoing decline in US bank revenues as reflected in the recent set of bank results. Thus, aggregate net revenues of the six largest US banks, net of interest expenses, have fallen by 16.3% over the past two quarters (see Figure 5) and are down 4.1% YoY in the first three quarters of this year. CLSA’s US bank analyst Mike Mayo expects that this decade should see the worst US banking industry revenue growth since the Great Depression in the 1930s. The US banking industry’s average annual revenue growth declined from a peak of 12% in the 1970s to 6% last decade while Mayo expects the growth for this decade (2010-2019) to slow to 2%.

Click on charts to enlarge, courtesy of CLSA Asia-Pacific Markets.

And then this:

GREED & fear would advise investors to focus on this revenue line when looking at banks, at least as much as the profit line which can be manipulated so extensively via discretionary accounting techniques. This point can be seen in the recent discrepancy in the results announced by Sumitomo Mitsui Financial Group (SMFG) in Tokyo and in New York.

So, you know ...