Banks Trade Above Book Value for First Time in Years, BCG Urges AI and Growth Investments
Event summary
- 80% of global bank equity (excluding China) now trades above book value, a first in years.
- Banks plan to invest 2% of revenue in AI in 2026, with tech industry spending more.
- M&A momentum is strongest in over a decade, offering opportunities for portfolio reshaping.
- AI is expanding addressable markets in wealth management, lending, and fee-based opportunities.
- BCG analyzed 1,498 financial institutions globally for its report.
The big picture
Banks are experiencing a durable recovery with improved profitability and strengthened balance sheets, but they face investor skepticism about sustained growth. The industry must shift from defending existing profitability to building a business model less reliant on the balance sheet, leveraging AI and M&A to close the P/E discount gap. The best opportunities lie at the intersection of AI, nonbank financial institutions, and digital assets, requiring bold execution and structural redesign.
What we're watching
- AI Integration
- How banks will deploy AI at enterprise scale to redesign operating models and business strategies.
- Growth Strategy
- Whether banks can sustain compounding growth by investing in scalable opportunities rather than returning capital through buybacks and dividends.
- Disruption Navigation
- The pace at which banks can position themselves at the intersection of AI, nonbank financial institutions, and digital assets to capture new opportunities.
Related topics