A study that compares returns on risk-weighted assets conducted by Bain & Co. had shown that even the largest banks in Scandinavia can barely cover capital costs. The financial institutions with the highest returns ratio in Europe were Nordic banks, with an average of 1.9% in 2012. The report also showed that Stockholm-based Swedbank AB and Svenska Handelsbanken had the highest returns among the largest banks in western Europe. The two banks generated returns at 4% and 3.6% respectively.
Although the study had confirmed how Swedish banks outperform their peers, it had also showed that Europe's financial industry in general is prepared to catch up. The average returns for European banks was 0.5% in 2012 and 0% in 2008. Investors have been expecting an improvement with returns as Europe rises from a debt crisis. After a 23% increase in 2012, The Bloomberg index of European banks had gained another 12% this year, signaling a bigger chance of increasing returns.
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