A tough year for retail banking in Europe...
Click here to read the A.T. Kearney Retail Banking Radar
European retail banks struggled through another difficult year in 2015, with income just slightly improving and costs still high. However, profits are up as banks continue to reduce risk provisions, and the number of bank branches is progressively declining as more business moves online.
Leaders are more dependent than ever on innovation, and they are embracing change in order to win back the hearts and minds of clients.
Other highlights from the study this year include:
- Overall, the industry faced a year of unimpressive development. Income per customer has slightly increased, to €666. Historically low interest rates and still-weak client confidence are weighing on the numbers.
- Stagnant top line was counterbalanced by another round of reduced risk provisions, which drove a material improvement in profit per customer, to €201. Employee productivity improved as well.
- Banks’ cost-income-ratio remained almost flat for the eighth year in a row, at 61 percent. In an environment of little to no growth, the ability to sustainably reduce costs will be a recipe for financial success.