The degree of shift that has occurred and is occurring as we speak with respect to bank valuations is simply staggerring.  What got me going on this was when I noticed that the combined market capitalisation (stock exchange value of a company) of Lloyds Bank, Barclays, and HBOS was less than several of the Canadian banks.  So with the valuable assistance of Google Finance here are some statistics, with some notes following.

1. the banks picked here have had their value cut in half
2. the UK banks are in terrible shape with low market cap, and reflecting low P/E
3. the Canadian banks are in fact on a par with UK banks now in terms of market cap, despite being much smaller, less than half, in size

Relevance to Bankwatch:

The question will be:  which banks can break out of this with their customers and gain at the expense of the others.  CitiBank are trying to do it in the courts in the fight with Wells over Wachovia.  That sounds like desperation to me.  They (Citi) were caught out with a ridiculously low offer for Wachovia, a panicked US Federal Government accepted the offer, and now they are left to find a respectable way out.  Wells are always innovative, and make good use of internet and trying to understand current / new customer behaviours, so I hope they make it.  Wells/ Wachovia would offer national coverage, and a real competitor to Bank of America.  That reason alone is good for consumers, and would be a good reason for the Government to let it proceed.

Which banks will take advantage of their internet presence to improve service to an increasingly Gen X/ Y oriented customer base, and reduce costs, with a view to building their way out.