Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.


A new study of the 50 largest banking groups in the UK and Europe calls for disruptive management strategies to reverse lacklustre profitability across the industry, warning that Return on Equity (RoE) and Common Equity Tier 1 (CET1) ratios are in danger of falling below the average market and regulatory minimum over the next five years.

The European Banking Study (EBS), launched today by zeb, one of the leading global financial management consultancies, shows that European banks are lagging behind their international counterparts in profitability and operational efficiency. It goes on to predict four major trends that will dominate the European banking scene from now until 2021 in response to the current unhealthy state of the industry.

“Profitability has become the critical concern for the European banking industry,” said Bertrand Lavayssière, Managing Director UK, zeb.  “Actual organic profitability of Europe’s top 50 banks has declined significantly since 2012, and their average RoE has fallen to a level that is about half of what shareholders should expect based on a standard cost of equity calculation.

“And with Brexit looming ever-closer, it’s set to be an even bumpier road ahead. Although the top 50 European banks have strengthened their capital positions with a CET1 ratio of 13.5% in 2016, upcoming regulation and a continuation of the relatively low yield environment will increase the burden on these banks. If banks do not employ disruptive strategies to reverse their own fortunes, they risk becoming targets for acquisition.  Without taking decisive action quickly, banks’ profitability and financial strength could deteriorate further by the end of the decade – we could see, in a baseline scenario, RoE fall to 1.5% and CET1 ratios below the average market and regulatory minimum.”

The zeb European Banking Study includes:

  • A detailed study of Europe’s top 50 largest banking groups, with performance comparison to other global markets including US, Chinese and Australian banks
  • Expert analysis of the factors affecting the industry and dissection of the figures showing increased profitability of banks in 2016
  • Projections by zeb on what the next five years hold for global banks, including identification of four major trends that will dominate the European banking scene from now until 2021 in response to the current unhealthy situation of the industry
  • Recommendations for what is required from European banks if they are to prosper, including major changes needed, both in terms of more stringent re-evaluation of their business models and the need for more innovative approaches

Continue Reading

Recent Posts