European Banking Barometer 2016

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European Banking Barometer – 2016

Seeking stability in an uncertain world

 

EY's European Banking Barometer – 2015 EY - About the European Banking Barometer EY - Overall optimism of senior banking executives slips to its lowest since 2012 EY - FinTech collaboration will enable banks to innovate and grow.

Summary

Our seventh European Banking Barometer shows that bank executives are at their least optimistic since 2012, when the Eurozone debt crisis was at its height.

That said, our study – perhaps surprisingly – reveals some significantly more positive sentiment when executives look below the bank-wide level and assess the outlook for specific lines of business.

A further significant finding is that issues around risk and regulation remain at the top of banks’ agenda. At the same time, we’re seeing increased emphasis on cost reduction.

For banks looking to grow in today’s challenging environment, the study reveals how they are increasingly looking to forge partnerships with FinTech firms, who can play an important role both in accessing customers and in serving them better.

European banks reposition for a long-term environment of low growth

Highlights

52%

Only 52% of respondents expect performance to improve in the coming year – down from 56% last year. The general decline in confidence differs dramatically from market to market.

Executives in some markets (Ireland, Spain and the UK) expect banks to increase their ROE by about 2.5% in the next 12 months.

Even if Europe’s banks as a whole succeed in meeting their current expectations for revenue growth and cost reductions, we’ve calculated that they’ll fail to achieve even the average 1.1% ROE uplift they anticipate.

Risk management was ranked as bankers’ top priority for 2016.

54%

With cost cutting and efficiency measures becoming a renewed focus, headcount reduction is predicted to be at its highest level since 2012 at 54%.

 

Market outlook

 

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About the study

Now in its seventh edition, EY’s European Banking Barometer is an annual research study that “takes the temperature” of opinion and sentiment in the European banking industry.

Based on online questionnaires and telephone interviews with 250 senior bankers across 12 European markets, the study examines the impact of Europe’s macroeconomic outlook on European banks, and the resulting priorities that they will focus on over the coming 12 months.

The fieldwork for the 2016 Barometer was conducted during November and December 2015, and involved interviewees from a wide range of financial institutions covering at least 50%* of banking assets in each national market.