The approaching UK exit from the European Union will reduce the profitability of European banks and break their system's integrity, Igor Sechin, the CEO of Russian energy giant Rosneft, said Thursday, APA reports citing Sputnik.
"The upcoming Brexit will lead to a break in the integrity of the European banking system and a further decrease in the profitability and value of European banks," Sechin said at the Eurasian Economic Forum.
According to the Rosneft CEO, half of all European state bonds and 20 per cent of investment-grade debt securities had negative returns in the middle of the year, while the lack of the necessary investment tools led to a significant drop in the capitalization of European banks — over five years, the Euro Stoxx bank index fell by half.
"The European economy is in a difficult position. Negative interest rates have had a significant impact on the profitability of European financial markets and the efficiency of the banking system in Europe," Sechin said.
He noted that ten years ago, the profit of leading European banks was 30 per cent higher than that of their US competitors.
"Now the situation has radically changed, and European banks are noticeably inferior to US banks, profits of which are three times higher. Moreover, a $399 billion capitalization of the US bank JP Morgan alone, is above the total capitalization of the five largest European banks," the head of Rosneft stressed.
The 12th annual Eurasian Economic Forum "Business Connecting Eurasia Dialogue - From the Atlantic to the Pacific" is taking place in the Italian city of Verona and will last until 25 October.