Most of the 'productive' capital in a bank is 'human' capital - ie the people..
The idea that stock owners "own" labour does not make sense. The price of labour is defined by the labour market. If their "capital" is labour, the picture is similar: the labour costs for NORDEA are 2 500 euros. So "Return on Labour" is 140%.
And stockholders do indeed "own" the organisation (and brand and power), in the sense that if they decide to do so, they can - legally and without any great social stigma - murder it in its sleep. This entitles them to a cut of the added value that the organisation (resp. brand or power) produces which is above and beyond the added value that the members of the organisation could produce on their own.
And since the added value created by the organisation, brand and power is, in a bank, substantial, the shareholders' apparent return on capital is substantial.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
If they have low wages, relative to "added value," that just means there is an oversupply of labour.
There is no lack of labour, return on capital is 1000% and a country of 5 million has just 4 banks? Of course, the reason for these profits is clear:
Banking is a government created monopoly. Free lunch to stock owners.
In many cases, this doesn't matter, because in many cases money is not the limiting factor of production. But it is when dealing with the financial system, and its interaction with the rest of the economy.
