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European Bank Barometer
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Transcript of European Bank Barometer
European Bank Barometer
Weaker confidence and continued internal
focus makes for a poor 2013 outlook
Autumn 2012
About the study
Ernst & Young’s European Banking Barometer is a bi-annual study to determine the views of senior
bankers across the major banking markets in Europe. The research focuses on the current macro-
economic environment and how it will impact their organization and the banking industry as a whole over
the next six months.
The Autumn / Winter 2012 Barometer consists of 269 interviews with senior bankers across 11 markets
in Europe – Austria, Belgium, France, Germany, Italy, the Netherlands, the Nordics, Poland, Spain,
Switzerland and the UK.
The fieldwork, consisting of telephone interviews and online questionnaires, was conducted throughout
Autumn 2012 by two external research agencies on Ernst & Young’s behalf. The aim was to interview
senior bankers at a range of institutions representing at least 50% of the market, defined as assets
owned.
Interviews were not conducted with subsidiaries of member / group banks, and a range of bank types
were interviewed in each market to ensure a fair reflection of the industry in each country.
The results are presented in an aggregate format and shown in percentages. Please note that where
charts do not add up to 100%, it is because participants either chose not to answer the question or
selected ‘Don’t know’ or ‘Not applicable’ as their answer. Where possible we've compared answers
against those given in Spring 2012 but some questions have changed or are new.
We would like to thank all the research participants for their contribution to the study.
Page 2 European Bank Barometer Survey results: Belgium
European Overview
Further cost cutting measures, restricted lending and consolidation pressures will define an even more cautious
banking industry in the next six months.
Cost cutting to bite in first half of 2013 with more job losses as crisis refuses to fade
► Cost cutting is now second only to compulsory regulation and risk management in European banks’ priority list.
► Cutting costs, streamlining processes and minimizing non-essential spend are all now in the top five priorities of banks
for the next six months.
► Forty-five percent of European banks expect headcount to decrease in the next six months as they struggle to control
costs in the low-growth environment.
► Banks in the Netherlands and the UK will be worst affected with 70% and 64% of banks respectively expecting to
decrease their headcount.
► Banks in the Nordics are more optimistic but even in this region 22% are expecting to reduce headcount.
► Most cuts will be in head office functions with 58% of banks expecting cuts in this area.
► The biggest cuts are expected from the universal and corporate / investment banking sectors, where over half of
respondents expect to make headcount reductions.
Growing concerns about the European economy and sovereign debt crisis dominate the industry
► There are rising concerns about the impact of the Eurozone debt crisis in the next six months.
► Banks in Spain, France, Switzerland and Italy are most worried. Banks in the Netherlands and Belgium are the least
worried.
► Macro-economic worries continue to dominate the European banking industry with banks split on whether their
economy will remain the same (40%) or worsen (42%).
► The outlook is worse now then when we launched the Spring 2012 edition of the European Banking Barometer.
Page 3 European Bank Barometer Survey results: Belgium
European Overview
Actions in 2013 will result in fewer banks, many of them much smaller, as they struggle with current business
models and the capital intensive environment
► The industry will be reshaped through consolidation, asset sales and joint ventures, with 47% of banks expecting to
see significant consolidation happening in their markets within the next three years.
► Almost all Swiss respondents and 78% of Spanish respondents anticipate consolidation, but just 1 in 10 in the UK,
and none in Belgium do.
► Industry consolidation is most anticipated in wealth management and private banking. Specialist banks are least likely
to see consolidation.
► Some 30% of banks surveyed intend to sell assets in the next six months, with Spanish and UK banks likely to be the
most active.
Banks are placing renewed emphasis on increasing cash reserves and deleveraging
► Pressure to build capital buffers means that banks are pushing to increase the size of their cash reserves through a
mix of actions.
► Fifty-six percent plan to introduce more incentives to boost customer deposits, heightening the war for deposits in
some markets.
► Fifty-three percent are aiming to reduce the size of their balance sheet.
Credit remains tight across Europe and banks are increasingly nervous about the impact of non-performing
loans on their books, which is having a knock-on effect on their lending policies
► Eighty-five percent of banks expect provisions to remain at their current level or increase in the short-term.
► Worst hit are Poland, Spain and Italy where 67%, 56% and 54% of respondents respectively expect to increase
provisions. Best performing are the Nordics where only 23% expect an increase in provisions, closely followed by 30%
in Austria and 32% in the UK.
Page 4 European Bank Barometer Survey results: Belgium
European Bank Barometer Survey results: Belgium Page 5
Economic environment & financial markets
Belgian banks less confident than European average
Percentage of respondents answering Spring 2012: What’s your outlook for the business environment over the
next six months?
Autumn 2012 Spring 2012
Page 6 European Bank Barometer Survey results: Belgium
4 3
36 24
36
43
24 28
2
0
20
40
60
80
100
Belgium Europe
Very negative Slightly negative
Neutral Slightly positive
Very positive
How do you expect the general economic outlook in your country to change over the next six months?
Comments:
• Compared to Spring 2012 Belgian banks have become less confident
European banks show indications of a fall in optimism regarding the economic outlook over the next six months
Percentage of respondents answering
Autumn 2012 Spring 2012
41
4
11
6
26
11
38
4
37
19
20
27
59
30
17
48
47
36
48
11
39
67
80
32
37
59
78
26
42
26
48
52
41
33
0 20 40 60 80 100
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Improve Remain at today’s levels Worsen
51
13
38
18
25
31
34
29
28
30
24
24
43
63
28
63
44
42
42
49
40
43
36
41
6
25
34
18
31
27
24
22
32
27
40
35
0 20 40 60 80 100
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Positive Neutral Negative
Spring 2012: What’s your outlook for the business environment over the
next six months?
Page 7 European Bank Barometer Survey results: Belgium
How do you expect the general economic outlook in your country to change over the next six months?
Comments:
• Compared to Spring 2012 Belgian banks have become less optimistic in Autumn 2012. None of the Belgian
banks expects the economy to improve in the next six months.
• UK is most optimistic with 41% foreseeing an improvement, closely followed by Italy and France. Poland is
the most pessimistic country: 78% worsening.
European Bank Barometer Survey results: Belgium Page 8
European debt crisis
Belgian banks expect a decreased impact of the sovereign debt crisis over the next six months
28 20
42
38
30 42
0
20
40
60
80
100
Belgium Europe
No impact Yes, a minor impact Yes, a substantial impact
Autumn 2012 Spring 2012
33
3
50
17
17
45
26
9
0
20
40
60
80
100
Belgium Europe
Significantly decreased impact Slightly decreased impact
About the same Slightly increased impact
Significantly increased impact
Page 9 European Bank Barometer Survey results: Belgium
What level of impact do you think the Eurozone sovereign debt crisis will have on the banking sector in your country over the next six months, in comparison to the previous six months?
Comments:
• Compared to the Europe, Belgian banks are much more optimistic. 20% of the European banks expect a
decreased impact against 83% of the Belgian banks.
• In Europe 35% of the banks expect an increased impact of the sovereign debt crisis over the next six months
Although there is a slight improvement in the sentiment at a European level, there are some notable exceptions
Autumn 2012 Spring 2012
36
41
67
17
17
15
44
32
44
35
20
55
37
11
72
70
60
31
52
41
45
17
50
9
22
22
11
13
25
26
16
15
20
83
30
0 20 40 60 80 100
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Increased About the same Decreased
33
63
56
42
29
32
44
55
28
42
30
64
41
25
24
48
42
38
34
31
54
38
42
28
27
13
20
10
29
30
22
14
18
20
28
8
0 20 40 60 80 100
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Yes, a substantial impact Yes, a minor impact No impact
Page 10 European Bank Barometer Survey results: Belgium
What level of impact do you think the Eurozone sovereign debt crisis will have on the banking sector in your country over the next six months, in comparison to the previous six months? (cont’d)
Comments:
• Belgium is the most optimistic country with 83% of the banks foreseeing a decreased impact of the sovereign
debt crisis. Spain is by far the most pessimistic country with 67% of the banks foreseeing an increased impact.
• Besides Belgium, in Autumn 2012 the Netherlands is the only country with more banks expecting an decreased
impact than an increased impact (25% decreased vs 15% increased)
European Bank Barometer Survey results: Belgium Page 11
Business outlook and focus areas
Belgian banks less confident than in Spring 2012
3
50
21
39
50 32
5
0
20
40
60
80
100
Belgium Europe
Weaken significantly Weaken slightly
Stay the same Strengthen slightly
Strengthen significantly
0,2 10 10
70 67
20 23
0
20
40
60
80
100
Belgium Europe
Very poorly Fairly poorly Fairly well Very well
Autumn 2012 Spring 2012
Page 12 European Bank Barometer Survey results: Belgium
How do you expect your bank’s overall performance to change over the next six months?
Comments:
• Confidence levels of Belgian banks decreased sharply. In Spring 2012 10% of the banks expected that their
performance would weaken over the next six months, against 50% in Autumn 2012.
• Compared to European levels Belgian banks became much less confident in Autumn 2012, while in Spring 2012
the outlook of Belgian banks was almost identical to the European levels
Major changes in sentiment were evident across Europe
Autumn 2012 Spring 2012
4
7
6
9
13
2
4
5
59
31
30
18
36
25
38
23
26
32
50
44
32
50
41
29
55
45
38
35
41
39
33
9
15
22
41
15
10
33
26
21
50
22
6
15
6
4
3
0 20 40 60 80 100
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Strengthen significantly Strengthen slightly Stay the same Weaken slightly Weaken significantly
24
13
35
50
18
32
18
14
16
23
20
6
68
63
53
48
76
64
76
69
74
67
70
68
8
25
10
2
6
4
6
16
10
10
10
26
2
0,2
0 20 40 60 80 100
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Very well Fairly well Fairly poorly Very poorly
Page 13 European Bank Barometer Survey results: Belgium
How do you expect your bank’s overall performance to change over the next six months? (cont’d)
Comments:
• The UK is most optimistic with 59% saying the performance will strengthen.
• Polish and Dutch banks changed from the most positive outlook in Spring 2012 to the countries with the slightest
positivity in Autumn 2012.
Banks are reacting to continued economic uncertainty by increasing loan loss provisions...
Over the next six months, what do you expect your bank’s total provisions against loan losses to
do?
European Banking Barometer – Autumn / Winter 2012 Page 14
Autumn 2012
2
12
41
35
9
Decrease significantly Decrease slightly Remain at current levels Increase slightly Increase significantly
19
17
9
10
18
6
7
9
10
32
44
37
50
14
20
36
40
33
35
67
20
45
52
37
28
59
45
33
42
37
41
33
40
23
4
7
14
20
13
8
19
12
30
6
5
5
4
4
2
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Comments: • The economic uncertainty is reflected in 44% of banks expecting loan loss provisions (LLPs) to increase
over the next 6 month and a further 41% expecting them to remain at their current (elevated) levels. While LLPs remain high it is unlikely that banks will seek to increase lending significantly, constraining revenue growth and potentially perpetuating the economic malaise.
And tightening lending policies
How do you expect the corporate lending policies of banks in your country to change in each of
the following sectors over the next six months?
European Banking Barometer – Autumn / Winter 2012 Page 15
12
24
25
26
26
27
30
31
32
33
33
35
38
39
41
10
8
13
11
8
10
11
13
10
12
12
11
10
13
12
Other
Chemicals and pharmaceuticals
Craft
Commodities
Mechanical engineering
Utilities
Shipping
Tech., media and telecomms
Automotive
Infrastructure
Transport
Retail
Services
Construction
Real estate
More restrictive Less restrictive
15
20
20
21
22
24
26
27
31
33
35
40
27
25
19
17
22
19
26
16
20
13
24
22
Healthcare
Information technology
Commercial and professional services
Media and telecommunications
Manufacturing and industrials (incl. chemicals, eng.)
Energy, mining and minerals
SMEs
Retail and consumer products
Financial services
Transport (incl. automotive and shipping)
Commercial real estate
Construction
Comments: • The outlook for lending across a number of industries will weaken in 1H2013, with construction and
commercial real estate (CRE) looking particularly pessimistic. In addition to the relatively poor health of these sectors, this also reflects the higher risk-weightings attached to CRE.
Autumn 2012 Spring 2012
13
18
18
20
23
23
23
25
30
40
48
50
28
38
15
30
15
30
25
30
15
10
18
13
Healthcare
SMEs
Commercial services**
Manufacturing**
Media and telecomms
Information technology
Commercial real estate
Construction
Retail**
Financial services
Energy and mining**
Transport**
Austria
Germany
Belgium
Italy
France
Netherlands
Construction and property will feel the greatest lending policy tightening in 1H2013 How do you expect the corporate lending policies of banks in your country to change in each of
the following sectors over the next six months?*
European Banking Barometer – Autumn / Winter 2012 Page 16
22
22
25
25
28
28
28
31
31
34
38
50
22
13
25
22
13
25
25
19
28
19
22
22
SMEs
Retail**
Information technology
Commercial services**
Transport**
Healthcare
Energy and mining**
Manufacturing**
Financial services
Media and telecomms
Commercial real estate
Construction
5
11
11
16
16
16
21
26
26
32
42
47
32
37
47
11
32
26
26
37
5
21
16
16
Information technology
Media and telecomms
Healthcare
Transport**
Retail**
Manufacturing**
Commercial real estate
SMEs
Energy and mining**
Commercial services**
Financial services
Construction
10
10
10
10
20
20
20
30
40
40
30
30
20
30
20
20
30
40
20
30
10
20
Information technology
Commercial real estate
Retail**
Media and telecomms
Financial services
Commercial services**
SMEs
Healthcare
Energy and mining
Construction
Transport**
Manufacturing*
33
33
33
33
67
67
33
33
Media and telecomms
Healthcare
Financial services
Energy and mining**
Construction
Commercial real estate
Transport**
SMEs
Retail**
Manufacturing**
Information technology
Commercial services**
8
15
15
31
31
38
38
38
46
46
54
69
23
15
8
15
15
8
15
23
23
15
Energy and mining**
Manufacturing**
Healthcare
SMEs
Information technology
Retail**
Media and telecomms
Commercial services**
Transport**
Financial services
Construction
Commercial real estate
* Numbers are percentage of respondents answering.
** Manufacturing includes industries, chemicals and engineering; Transport includes automotive and shipping, Retail includes consumer products, Energy and mining includes metails and commercial services includes professional services.
Where totals do not add up to 100%, remaining respondents answered ‘Remain unchanged' or ‘Don't know'. Where no data is shown all respondents answered ‘Remain unchanged' or ‘Don't know’.
More restrictive Less restrictive
Nordics
Switzerland
Poland
UK
Spain
Construction and property will feel the greatest lending policy tightening in 1H2013 How do you expect the corporate lending policies of banks in your country to change in each of
the following sectors over the next six months?*
European Banking Barometer – Autumn / Winter 2012 Page 17
7
14
14
21
21
29
29
29
50
50
7
14
14
29
21
7
14
21
7
14
7
Healthcare
Energy and mining**
Manufacturing**
SMEs
Commercial services**
Retail**
Media and telecomms
Transport**
Information technology
Financial services
Construction
Commercial real estate
6
6
6
12
18
24
29
35
35
35
35
41
41
24
47
6
29
24
35
18
29
12
29
12
Healthcare
Energy and mining**
Commercial services**
Media and telecomms
Financial services
Construction
SMEs
Transport**
Manufacturing**
Information technology
Commercial real estate
Retail**
6
6
13
13
13
13
13
13
31
31
38
31
44
50
6
38
19
38
25
25
38
25
13
Commercial services**
Manufacturing**
Information technology
Transport**
Retail*
Media and telecomms
Healthcare
Financial services
Energy and mining
SMEs
Commercial real estate
Construction
24
24
24
29
35
35
41
41
41
53
53
59
18
29
6
6
29
18
24
18
12
24
35
35
Manufacturing**
Information technology
Healthcare
Media and telecomms
Financial services
Energy and mining**
Transport**
SMEs
Commercial services**
Retail*
Commercial real estate
Construction
10
10
15
15
20
25
25
30
30
30
40
40
10
25
20
25
15
20
5
10
25
5
25
Media and telecomms
Healthcare
Information technology
Energy and mining**
Commercial services**
Manufacturing**
Financial services
Transport**
Retail**
Construction
SMEs
Commercial real estate
More restrictive Less restrictive
* Numbers are percentage of respondents answering.
** Manufacturing includes industries, chemicals and engineering; Transport includes automotive and shipping, Retail includes consumer products, Energy and mining includes metails and commercial services includes professional services.
Where totals do not add up to 100%, remaining respondents answered ‘Remain unchanged' or ‘Don't know'. Where no data is shown all respondents answered ‘Remain unchanged' or ‘Don't know’.
Autumn 2012
As well as shrinking their balance sheets, banks are focused on making them stronger and more stable
How likely are the banks in your market to be engaged in the following activities over the next 6
months?
European Banking Barometer – Autumn / Winter 2012 Page 18
4
7
9
7
10
10
10
17
23
28
28
26
27
34
43
39
39
43
43
47
45
39
32
33
29
13
12
14
14
13
12
10
5
9
7
5
4
4
3
2
Lending to customers
Selling assets in markets outside Europe
Selling assets outside the home market
Accessing central bank funding programs
Seeking funding from wholesale capital markets
Reducing loan to deposit ratios
Reducing the size of the balance sheet
Introducing / increasing incentives to increase customer deposits
Significantly more Slightly more About the same Slightly less Signficantly less
Comments:
• As banks prepare for Basel III implementation there continues to be a heightened focus on stable deposits and delivering the balance sheet. However, increased competition is likely to push up the cost of these deposits and, given the depressed economy, asset sales may not deliver the required returns.
Austria
Germany
Belgium
Italy
France
Netherlands
Simplifying and strengthening the balance sheet will continue to be a priority across Europe
How likely are the banks in your market to be engaged in the following activities over the next 6
months?*
European Banking Barometer – Autumn / Winter 2012 Page 19
* Numbers are percentage of respondents answering.
10
30
20
40
20
20
30
50
60
70
40
60
70
70
10
30
10
30
20
10
10
10
60
10
10
Lending to customers
Selling assets outside Europe
Selling assets outside home market
Accessing central bank funding programs
Seeking funding from wholesale capital markets
Reducing loan to deposit ratios
Reducing the balance sheet
Incentives to increase customer deposits
33
17
17
17
17
33
50
33
17
17
50
17
33
33
17
33
67
83
67
17
17
17
50
33
17
11
11
19
4
26
11
11
11
19
30
30
41
15
56
56
41
30
37
41
37
44
22
26
37
41
19
7
11
11
7
4
11
4
4
7
4
4
4
5
5
5
10
15
15
5
50
40
25
50
20
40
50
30
40
40
55
35
50
35
40
55
5
10
15
5
15
10
10
10
5
3
3
10
10
23
8
3
23
21
28
33
33
23
41
46
26
33
44
33
44
44
38
28
44
31
18
10
13
8
10
18
8
13
8
13
3
3
5
Significantly more Slightly more About the same Slightly less Significantly less
8
4
2
6
2
4
12
21
30
26
21
18
12
27
40
46
48
55
60
43
50
50
34
23
14
13
11
22
26
13
10
6
2
6
10
10
6
4
4
Lending to customers
Selling assets outside Europe
Selling assets outside home market
Accessing central bank funding programs
Seeking funding from wholesale capital markets
Reducing loan to deposit ratios
Reducing the balance sheet
Incentives to increase customer deposits
9
14
14
9
9
18
5
23
27
36
32
32
14
36
36
36
45
36
32
45
68
45
41
32
14
14
23
14
5
14
9
5
5
5
Significantly more Slightly more About the same Slightly less Significantly less
14
12
4
4
7
11
4
37
23
27
11
19
33
37
42
44
23
19
63
62
33
41
35
11
23
31
19
4
22
7
15
7
18
12
4
12
4
4
4
Lending to customers
Selling assets outside Europe
Selling assets outside home market
Accessing central bank funding programs
Seeking funding from wholesale capital markets
Reducing loan to deposit ratios
Reducing the balance sheet
Incentives to increase customer deposits
Nordics
Switzerland
Poland
UK
Spain
Simplifying and strengthening the balance sheet will continue to be a priority across Europe
How likely are the banks in your market to be engaged in the following activities over the next 6
months?*
European Banking Barometer – Autumn / Winter 2012 Page 20
* Numbers are percentage of respondents answering.
7
15
15
22
11
15
15
15
30
48
59
41
41
41
44
41
37
30
22
30
33
11
19
30
26
4
4
4
11
26
22
11
4
4
4
7
4
6
6
17
22
6
39
11
6
11
22
28
39
61
39
11
56
56
50
44
11
11
22
56
11
11
11
11
22
22
17
28
22
11
6
4
4
4
4
22
26
9
22
39
26
22
22
48
57
70
61
39
61
52
43
22
13
17
9
22
9
13
13
22
9
9
9
Lending to customers
Selling assets outside Europe
Selling assets outside home market
Accessing central bank funding programs
Seeking funding from wholesale capital markets
Reducing loan to deposit ratios
Reducing the balance sheet
Incentives to increase customer deposits
European banks expect most of Deposits and Retail Banking
Percentage of respondents answering
Europe – Autumn 2012 Europe – Spring 2012
Page 21 European Bank Barometer Survey results: Belgium
3
4
5
9
5
5
13
3
5
15
20
22
37
27
7
35
20
29
44
41
41
32
36
5
35
40
42
16
22
16
12
16
2
11
18
15
9
5
6
3
5
3
1
7
2
13
9
9
7
11
78
5
11
7
0 20 40 60 80 100
Transaction advisory (e.g., M&A)
Securities trading
Securities services
Retail banking
Private wealth management/AM
Other
Deposit business
Debt and equity issuance
Corporate banking
Very good Fairly good
Neither good nor poor Fairly poor
Very poor Does not apply
26
20
37
28
22
39
34
37
34
44
41
36
44
38
9
17
8
10
11
8
11
1
6
1
2
2
3
3
27
23
11
19
29
7
15
0 20 40 60 80 100
Transaction advisory (e.g., M&A)
Securities trading
Retail banking
Private wealth management/AM
Other
Deposit business
Corporate banking
Good Fairly good Fairly poor Poor Does not apply
Please note, that chart may not add up to 100% due to the respondents not answering the respondent selecting ‘Don’t know’ or ‘Not applicable’
How do you rate the outlook for your bank over the next six months in each of the following business lines?
Comments:
• In Autumn as well as Spring 2012 the outlook for Deposit Business and Retail Banking is most positive.
• Overall the outlook for all business lines in Autumn 2012 is considered less optimistic than it was in Spring
2012
Banks will be net sellers of assets in 1H2013
Which, if any, of the following is your bank likely to consider over the next six months in relation
to the countries in which it operates?*
European Banking Barometer – Autumn / Winter 2012 Page 22
Autumn 2012
* Numbers are percentage of respondents answering (respondents could select more than one option).
Please note, chart may not add up to 100% due to respondents selecting ‘Don’t know’ or ‘Not applicable’.
34
29
18
30
None of these Partnerships or joint ventures Buy assets Sell assets
55
19
52
17
22
30
38
18
33
30
17
30
18
11
19
11
17
15
10
12
56
18
33
10
41
19
37
33
17
50
33
18
26
29
50
10
23
52
7
39
43
15
28
52
22
34
70
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Comments:
• Banks will continue to de-leverage during 1H2013 as they sell assets to reduce risk and build capital ahead of Basel III implementation. In some geographies, the selling of assets has also been prompted by competition regulation (e.g., UK) and attempts to stabilize the banking sector (e.g., Spain).
European Bank Barometer Survey results: Belgium Page 23
Employment
European Bank Barometer Survey results: Belgium Page 24
Half of Belgian banks expect headcount decrease over next six months
18
50
58
33
24 17
0%
20%
40%
60%
80%
100%
Spring 2012 Autumn 2012
2 8 15
37
58
34
22 18
3 3
0%
20%
40%
60%
80%
100%
Spring 2012 Autumn 2012
Belgium Europe
Decrease significantly Decrease slightly Stay the same Increase slightly Increase significantly
Percentage of respondents answering
Over the next six months, do you expect the headcount of your bank to … ?
Comments:
• Compared to Spring 2012 more Belgian banks expect to see their headcount decrease. From 18% in
Spring to 50% in Autumn 2012.
• Compared to the European average Belgian banks in Autumn 2012 have become much less positive
about headcount developments than they were in Spring.
Most European banks expect headcount decrease
Percentage of respondents answering
Autumn 2012 Spring 2012
9
26
26
11
30
15
33
18
19
21
17
27
37
37
33
48
15
23
40
41
34
33
44
64
37
37
56
22
70
44
42
41
45
50
56
0 20 40 60 80 100
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
36
25
14
23
27
31
20
12
38
25
24
26
52
63
54
61
55
50
72
65
56
58
58
58
12
13
32
16
18
19
8
22
6
17
18
16
0 20 40 60 80 100
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Page 25 European Bank Barometer Survey results: Belgium
Increase Stay the same Decrease
Over the next six months, do you expect the headcount of your bank to … ? (cont’d)
Comments:
• Only the Nordics expect headcount growth during the second half of 2012. In the first half of 2012, 9 out of
11 countries expected headcount growth.
• The Netherlands and UK see headcount shrinking considerably (70% and 64%).
• In Autumn 2012 in all European countries, more banks expect headcount decrease than in Spring 2012.
Autumn 2012 Spring 2012
Head office and administrative functions will face the biggest cutbacks
Which areas of the business do you expect headcount to be most impacted?*
European Banking Barometer – Autumn / Winter 2012 Page 26
12
12
14
14
15
15
16
16
17
19
21
12
31
15
17
9
22
19
12
20
IT
Finance / tax
Sales
Product / business unit
Technology
Other
Retail
Marketing
HR
Operations
Decrease Increase
* Numbers are percentage of respondents answering that headcount would either increase or decrease.
11
54
20
27
11
13
58
39
30
20
19
10
Head office functions / admin
Retail and business banking
Investment banking
Private wealth management / AM
Corporate banking
Other
Comments: • Retail banking is likely to see an increase in staff numbers over the coming months, in line with bankers’
expectations of increased demand for retail products. Investment banking divisions and head office functions will be most impacted as banks are forced to reshape business and operating models.
European Banking Barometer – Autumn / Winter 2012 Page 27
Business priorities and product line expectations
Belgian banks don’t expect consolidation over the next six months
Autumn 2012 Spring 2012
100
49
4
47
0
20
40
60
80
100
Belgium Europe
No Don’t know Yes
49 37
37 50
14 13
0
20
40
60
80
100
Belgium Europe
No
Yes, in the medium to long term
Yes, in the short term (within the next 12 months)
Page 28 European Bank Barometer Survey results: Belgium
Percentage of respondents answering
Do you expect there to be significant consolidation of the banking sector in your country?
Comments:
• Contrary to Belgium, the European banks are evenly spread. Half of the banks expect consolidation and
the other half doesn’t expect consolidation over the next six months.
Expectations in Europe in relation to likely consolidation vary considerably by country
Autumn 2012 Spring 2012
9
96
78
44
48
25
41
34
48
47
70
5
6
15
8
11
4
86
4
22
50
52
60
51
66
41
49
100
30
0 20 40 60 80 100
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Yes Don’t know No
10
13
31
6
21
14
4
12
13
14
14
42
50
51
37
46
39
62
74
43
50
37
71
48
38
18
57
33
47
34
27
45
37
49
14
0 20 40 60 80 100
UK
Switzerland
Spain
Poland
Nordics
Netherlands
Italy
Germany
France
Europe
Belgium
Austria
Yes, in the short term Yes, in the medium to long term No
Page 29 European Bank Barometer Survey results: Belgium
Percentage of respondents answering
Do you expect there to be significant consolidation of the banking sector in your country? (cont’d)
Comments:
• Expectations in Europe vary considerably; Belgium and UK expect (almost) no consolidation (0% and 9%
respectively), while 96% of the Swiss banks expects banking consolidation
12
13
13
17
17
18
24
24
26
27
50
52
53
57
65
0 20 40 60 80 100
Reducing the number of products
Off-shoring
New foreign markets/internationalisation
Establishing new business segments
Disposing of assets or businesses
Acquiring new assets or businesses
New remunterations systems
Current changes in financial reporting/IFRSs
Developing/introducing new products
Restructuring business operations
Streamlining processes
Cutting costs
Minimising all non-essential expenditure
Preparing for Basel III
Risk management
Belgian banks focus on cutting costs and risk management over the next six months
Percentages with score 1 to 3
Belgium Europe
17
17
17
17
33
33
33
33
50
50
67
83
83
0 20 40 60 80 100
Reducing the number of products
Disposing of assets or businesses
Off-shoring
New foreign markets/internationalisation
Establishing new business segments
Acquiring new assets or businesses
Streamlining processes
Restructuring business operations
New remuneration systems
Current changes in financial reporting/IFRSs
Preparing for Basel III
Minimising all non-essential expenditure
Developing/introducing new products
Risk management
Cutting costs
Page 30 European Bank Barometer Survey results: Belgium
How important are the following activities likely to be for your bank over the next six months?
Comments:
• Belgian banks focus more or less on the same activities as the European banks. Biggest difference is the much
bigger focus on developing new products: 67% of the Belgian banks focuses on this activity against 26% of the
European banks
7
11
12
14
15
19
20
20
22
23
26
41
44
56
58
Restructuring business operations
Reducing the number of products
Current changes in financial reporting / IFRSs
Disposing of assets or businesses
Acquiring new assets or businesses
Establishing new business segments
Off-shoring
New foreign markets / internationalization
New remuneration systems
Developing / introducing new products
Streamlining processes
Cutting costs
Minimizing all non-essential expenditure
Risk management
Preparing for Basel III
Across Europe, the growth agenda continues to be overshadowed by a focus on risk, region and cost
How important are the following activities likely to be for you bank over the next six months?
European Banking Barometer – Autumn / Winter 2012 Page 31
Austria
Germany
Belgium
Italy
France
Netherlands
21
24
26
28
30
34
37
44
47
51
55
56
59
59
74
Reducing the number of products
Acquiring new assets or businesses
Current changes in financial reporting / IFRSs
Disposing of assets or businesses
Off-shoring
New foreign markets / internationalization
Establishing new business segments
Developing / introducing new products
Restructuring business operations
New remuneration systems
Preparing for Basel III
Streamlining processes
Minimizing all non-essential expenditure
Cutting costs
Risk management
17
17
17
17
33
33
33
33
50
50
67
83
83
Reducing the number of products
Disposing of assets or businesses
Off-shoring
New foreign markets / internationalization
Establishing new business segments
Acquiring new assets or businesses
Streamlining processes
Restructuring business operations
New remuneration systems
Current changes in financial reporting / IFRSs
Preparing for Basel III
Minimizing all non-essential expenditure
Developing / introducing new products
Risk management
Cutting costs
10
10
10
10
10
10
20
40
50
70
70
80
90
Reducing the number of products
New foreign markets / internationalization
Off-shoring
New remuneration systems
Establishing new business segments
Disposing of assets or businesses
Restructuring business operations
Acquiring new assets or businesses
Developing / introducing new products
Cutting costs
Current changes in financial reporting / IFRSs
Risk management
Minimizing all non-essential expenditure
Streamlining processes
Preparing for Basel III
5
16
20
20
21
22
30
30
42
45
45
50
50
50
75
Off-shoring
Reducing the number of products
New foreign markets / internationalization
Establishing new business segments
Disposing of assets or businesses
Developing / introducing new products
New remuneration systems
Acquiring new assets or businesses
Restructuring business operations
Streamlining processes
Current changes in financial reporting / IFRSs
Preparing for Basel III
Minimizing all non-essential expenditure
Cutting costs
Risk management
* Percentages with scores 8 to 10.
2
2
6
10
10
14
16
16
18
21
56
56
64
65
72
Off-shoring
New foreign markets / internationalization
Establishing new business segments
Reducing the number of products
New remunterations systems
Disposing of assets or businesses
Developing / introducing new products
Acquiring new assets or businesses
Restructuring business operations
Current changes in financial reporting / IFRSs
Minimizing all non-essential expenditure
Cutting costs
Streamlining processes
Preparing for Basel III
Risk management
Nordics
Switzerland
Poland
UK
Spain
Across Europe, the growth agenda continues to be overshadowed by a focus on risk, region and cost
How important are the following activities likely to be for you bank over the next six months?*
European Banking Barometer – Autumn / Winter 2012 Page 32
10
10
14
14
15
19
19
24
30
39
39
48
55
55
59
New foreign markets / internationalization
Establishing new business segments
Reducing the number of products
Developing / introducing new products
Acquiring new assets or businesses
New remuneration systems
Current changes in financial reporting / IFRSs
Off-shoring
Disposing of assets or businesses
Restructuring business operations
Preparing for Basel III
Streamlining processes
Minimizing all non-essential expenditure
Cutting costs
Risk management
4
4
4
7
11
11
18
18
19
19
52
53
56
60
60
Reducing the number of products
Off-shoring
Current changes in financial reporting / IFRSs
Disposing of assets or businesses
Establishing new business segments
Developing / introducing new products
New remuneration systems
Acquiring new assets or businesses
New foreign markets / internationalization
Restructuring business operations
Cutting costs
Risk management
Streamlining processes
Preparing for Basel III
Minimizing all non-essential expenditure
15
19
19
22
23
30
31
33
37
37
44
46
70
70
77
New foreign markets / internationalization
Streamlining processes
Reducing the number of products
Acquiring new assets or businesses
Off-shoring
Establishing new business segments
Current changes in financial reporting / IFRSs
New remuneration systems
Restructuring business operations
Disposing of assets or businesses
Developing / introducing new products
Preparing for Basel III
Minimizing all non-essential expenditure
Cutting costs
Risk management
0
6
6
6
6
6
11
18
22
23
28
50
51
56
66
New foreign markets / internationalization
Reducing the number of products
Off-shoring
Establishing new business segments
Disposing of assets or businesses
Acquiring new assets or businesses
Minimizing all non-essential expenditure
Restructuring business operations
New remuneration systems
Developing / introducing new products
Current changes in financial reporting / IFRSs
Preparing for Basel III
Streamlining processes
Cutting costs
Risk management
0
4
9
9
13
17
17
17
26
30
39
44
56
61
61
Disposing of assets or businesses
New foreign markets / internationalization
Off-shoring
New remunterations systems
Reducing the number of products
Establishing new business segments
Restructuring business operations
Acquiring new assets or businesses
Current changes in financial reporting / IFRSs
Developing / introducing new products
Risk management
Minimizing all non-essential expenditure
Cutting costs
Streamlining processes
Preparing for Basel III
* Percentages with score 8 to 10.
How do you rate the outlook for your bank over the next six months in each of the following
business lines?*
* Numbers are percentage of respondents answering.
Autumn 2012 responses are based on a five-point scale and spring 2012 responses are based on a four-point scale.
Please note, chart may not add up to 100% due to respondents selecting ‘Don’t know’ or ‘Not applicable’.
Autumn 2012 Spring 2012
The outlook across all business lines is significantly weaker going into 1H2013
European Banking Barometer – Autumn / Winter 2012 Page 33
26
20
37
28
22
39
34
37
34
44
41
36
44
38
9
17
8
10
11
8
11
1
6
1
2
2
3
3
Transaction advisory (e.g., M&A)
Securities trading
Retail banking
Private wealth management / AM
Other
Deposit business
Corporate banking
Good Fairly good Fairly poor Poor
Comments: Uncertainty continues to dampen investment banking activity as companies delay major investments and organic expansion. Reflecting this, banks expect deposits to increase, which will at least help those with funding challenges. Investment banks expect tougher conditions in the first half of 2013. Securities grew rapidly to become the principal contributor to investment banking revenues by 2008, but the volatility of returns through the crisis have led a number of banks to shift their focus to steadier business lines. The outlook for transaction advisory was also poor, as companies would rather consolidate or grow organically than expand through acquisition.
3
4
5
9
5
13
3
5
14
20
22
37
27
35
20
31
43
40
41
32
36
35
40
45
16
22
16
12
16
11
18
16
9
5
6
3
5
1
7
2
Transaction advisory (e.g., M&A)
Securities trading
Securities services
Retail banking
Private wealth management / AM
Deposit business
Debt and equity issuance
Corporate banking
Very good Fairly good Neither good nor poor Fairly poor Very poor
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Page 34 European Bank Barometer Survey results: Belgium