MUNICH (dpa-AFX) – The rapid rise in interest rates over the past year has driven up the profits of European banks, according to a study. According to the study, the operating results of retail banks in eleven European countries increased by an average of 18 percent in 2022, while revenues rose by 8 percent. In Germany, however, the average bank continues to operate far less profitably than in the rest of Europe. This is the result of the analysis of the European banking sector, which the management consultancy Strategy& published in Munich on Sunday.
According to the report, Swiss banks earned the most money – as in the previous year – with a profit of 426 euros per customer. The Austrian institutes were with 292 euro in fifth place, the German houses with 201 euro on place nine and thus under the last three. The consultancy also drew a comparison with retail banks in the USA and Australia – the European houses grew faster and achieved higher profits per customer on average. In the years following the 2008-09 international financial crisis, U.S. banks were still considered more competitive internationally.
“The general conditions for European retail banks are more favorable than they have been for a long time,” said study author Andreas Pratz. In addition to rising interest rates, the cost-cutting programs of recent years are now having an effect, according to Strategy&. According to the study, 80 percent of European banks have increased their profits over the past six years by transforming their business and operating models. This essentially means the wave of branch closures and the expansion of online banking.
However, the authors warn Europe’s bankers not to rest on the fruits of their labor: “For a large proportion of retail banks, things are currently going steadily upwards,” said co-author Johannes Gärtner. “But that should not obscure the fact that at the same time many new providers are positioning themselves, for example from the big tech sector or the fintech scene.”/cho/DP/he
