The Euro Banking Pulse is a report based on analysis by A&M into the 24 largest European banks in 2018, scoring each of them against Key Performance Indicators (KPIs) linked to both profitability and resilience using proprietary calibration based on the European Banking Authority (EBA) and A&M thresholds. The report finds that top European banks lack adequate resilience and returns above the expectations of customers, markets and regulators.
The battle for the throne (BBVA, Credit Mutuel, Danske Bank, HSBC, ABN Amro, Credit Agricole)
- Despite being ranked among A&M’s highest performers for profitability and resilience, none of these banks score high enough to enter the sweet spot.
- Banks must firmly set their eyes on the prize and deliver consistently quarter over quarter if they want to be in the running.
The quest for profitability (Commerzbank, Barclays, RBS, Standard Chartered)
- Northern European banks have prioritised building up resilience but are now struggling to generate adequate returns.
- Banks must now put their profitability agenda on the frontline of decision making.
The resilience trail (Lloyds, Santander, Caixa Bank, Banca Intesa, Rabobank)
- These banks have identified profit pools but now need to build up resilience while demonstrating consistent quarterly performance.
- Banks now must prioritise building up a robust internal capital generating business model and strategies to address coming regulatory changes.
Shields up and strategic moves (BNP Paribas, Deutsche Bank, BPCE, Societe Generale, DZ Bank)
- These banks are among the lowest performers. They are falling behind the pack and need to rethink their strategy and restructure parts of their business.
- Cost restructuring and lean business models must be played simultaneously with difficult capital allocation decisions.
The full report includes the following:
- Overview of Pan-European banking landscape
- Profitability analysis based on;
- Return on Equity
- Return on Assets
- Net Interest Margin
- Cost-to-Income Ratio
- Balance Sheet Resilience analysis based on;
- Liquidity Coverage Ratio
- Asset Quality
- Country view
- A&M Global Score Ranking
- A&M Scorecard
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