European Banks: Cost-Cutting Continues

Branch closures and reduction in full-time employees will continue to 2020, as many banks go digital and invest in fintech startups

Derya Guzel 13 October, 2017 | 9:03AM
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Nordea's Stockholm office in Sweden

Digital expansions, cost-cutting, and regulatory issues remain key themes for European banks in the most recent quarter. In keeping with general trends for banks globally, European banks continue to invest in digitalisation and slim down their physical presences around Europe.

As indicated by EU banks’ restructuring plans, which aim to cut costs in the environment of lower interest rates and declining net interest margins (NIMS), European banks closed over 9,000 branches last year and shed 50,000 staff, according to data published by the European Banking Federation, or EBF. The total number of bank branches in the EU was 189,270 in 2016, a decline of 4.6% when compared with the previous year.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Assicurazioni Generali17.69 EUR-1.04Rating
AXA SA23.10 EUR-1.09
Goldman Sachs Group Inc391.46 USD-1.32Rating
Nordea Bank Abp109.00 SEK0.33Rating
Prudential PLC1,445.50 GBX-1.13Rating

About Author

Derya Guzel  is an Equity Analyst for Morningstar

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