The accountancy firm’s latest analysis also indicates that India’s banking market may overtake Japan’s in size by 2035, and Brazil’s may be larger than the UK’s by 2050.
The combined domestic banking assets of the ‘E7’ emerging economies of China, India, Brazil, Russia, Mexico, Indonesia and Turkey will exceed those in the ‘G7’ countries sooner than predicted before the financial crisis, according to PwC’s ‘Banking in 2050’ report.
The G7 comprises the US, Japan, Germany, the UK, France, Italy and Canada.
A previous analysis conducted by PwC in 2007 forecast that the E7 domestic banking assets would overtake the G7 in 2046, but the updated projections see this date brought forward by a decade to 2036.
John Hawksworth, chief economist at PwC, predicted a fundamental shift in the geography of the world economies would take place with huge implications for job creation, language learning and financial systems.
“The GDP of the E7 countries is currently well behind that of their G7 counterparts but we will see them at level pegging within the next two decades and well ahead within the next four,” he said.
“In the banking world, this shift is happening even faster than anticipated and appears to have been accelerated by the financial crisis as emerging market banks have been relatively shielded from the effects of declining asset values. We could now be talking about global banking assets quadrupling to around $300trn by 2050 with banks around the world fighting for a share. ”
Hawsworth added: “Three of the largest banks in the world by market capitalisation are Chinese and other leaders have heavy emerging market exposure, where they can capitalise on large, unbanked populations and booming demand for financial products. With populations of well over a billion each, access to markets like China and India is critical for growth.”
