Cost reduction in the European Banking sector - Roland Berger
Cost reduction in the European Banking sector - Roland Berger
Cost reduction in the European Banking sector - Roland Berger
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Target cost <strong>reduction</strong> varies by country depend<strong>in</strong>g on stress level of<br />
each domestic bank<strong>in</strong>g system as well as social constra<strong>in</strong>ts<br />
TARGET COST REDUCTION PER COUNTRY<br />
Social constra<strong>in</strong>t (Proxy : OECD Employee Protection Index)<br />
KEY LEVERS PER COUNTRY<br />
Concentration<br />
Levers<br />
-5// -10%<br />
-10 -10/ /-15%<br />
Low<br />
> Restructur<strong>in</strong>g, mergers, branches<br />
closure<br />
(338 ; 2.9)<br />
(441 ; 3.0)<br />
(na; 2.8)<br />
Medium<br />
> Mergers, outsourc<strong>in</strong>g, organizational<br />
<strong>in</strong>tegration<br />
(196 ; 2.4)<br />
OECD Average : 2.1<br />
(547; 2.4)<br />
High<br />
> Organizational <strong>in</strong>tegration, carveouts/outsourc<strong>in</strong>g,<br />
branches closure<br />
(201 ; 1.6)<br />
Very high<br />
> Offshor<strong>in</strong>g, out-sourc<strong>in</strong>g, Front-office<br />
productivity <strong>in</strong> <strong>the</strong> City of London<br />
-10 / -15% -15 / -20%<br />
-10 / -15% (251 ; 1.1)<br />
-15 / -20%<br />
Low<br />
> Productivity, carve-out/outsourc<strong>in</strong>g,<br />
<strong>in</strong>terbank alliances<br />
Stress level (Proxy : 5Y CDS)<br />
X / Y %<br />
<strong>Cost</strong> <strong>reduction</strong> target to be achieved<br />
(xxx ; x.xx) Average CDS 5Y by country base on Banks' headquarter / OECD Employee Protection Strictnes Index (0-6 scale)<br />
Source: <strong>Roland</strong> <strong>Berger</strong> analysis<br />
Bank<strong>in</strong>g_cost_<strong>reduction</strong>_FINAL_270712.pptx<br />
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