If Deutsche Bank has chosen a revolution without shedding the banking supermarket model is rushed. Explanations.
Seven years of reflections. Since the acute phase of the crisis in 2007-2008, the financial world has changed dramatically. Just like the current mutation Deutsche Bank, who, rather than to position “Goldman Sachs European” has chosen to reduce the size of its universal banking model, many institutions have had to evolve or will soon do.
Why is the issue of banking models is it restarted?
These topics are already old. But they are of recent months particularly urgent because the profitability of old models is clearly under pressure. For retail banking, lending to individuals or companies has become less lucrative due to the interest rate environment at least unusual, caused in recent months by the monetary policy of the ECB. At the same time, regulations from the crisis have reached maturity. Now when the bank lends or invests, it must stop security more capital. Its own funds are less profitable and the bank must allocate the most optimal way. Finally, years after other sectors, the Internet revolution has hit financial services. Customers expect more services, usability and responsiveness, raising very large IT projects. A requirement that Deutsche Bank has placed on its agenda as part of its strategic reorientation. Ultimate sting: politics regulators – Americans in particular – which now inflict billions of dollars in penalties, pushing banking groups to focus on what they do best. “ European banks must now make choices to reduce the size of their balance sheets to improve their capacity to ensure control of their risk ,” says Alex Koagne analyst at Natixis.
All countries are they affected?
Despite a common background, the landscape varies greatly from one country to another. In France, some groups, such as Crédit Agricole, have already reduced the sail internationally. Overall, the scope of adjustments occurred in institutions that have kept their integrity. The United States has the opposite way as the crisis was born very powerful universal banks: they are large retail establishments that have saved the investment banks adrift, like for example the purchase of Merrill Lynch by Bank of America. Not surprisingly, most countries shaken by the financial crisis – where states have had to nationalize banks or provide massive subsidies – are also those where restructuring has been most visible: the Netherlands, Spain or the United -um, where the work is not completed.
Europe she remains a land of choice for the universal banking model?
“ The principle of universal bank remains intact in all these countries. Only, they do not always have the same dimensions, choosing to focus on certain trades or not depends on local economic contexts , “says Bruno Saint-Florent, a partner at Oliver Wyman. The recent choice of Deutsche Bank have confirmed: there is no large investment bank has also retail business on the continent. “ This is no coincidence: low disintermediation of the economy makes it necessary for banks to finance businesses via credit and the use of stable retail deposits to fund “, argues Romain Burnand, co-founder of Moneta management company.
The promoters of this model also point out that it allows institutions to spread their risk between stable activities and other more volatile. Today, however, to solve their difficulties and reduce legal risks, some groups like the British Royal Bank of Scotland are pulling their massive corporate and investment banking activities. A movement that is associated with an accelerated focus on the UK market.
Who will benefit from these changes?
Three species could survive and even thrive in this new banking world. Subject to new regulations that penalize very large institutions, banking groups healthy could find themselves in a position to redeem all those who will not be able to solve the equation of profitability. For example, French banks have never made any secret of their appetite for the German market. Banking Union – which places the largest banks in the continent under a common European supervision – should also facilitate the cross-border transactions
Smaller “agile” players could also win.. “ A bank can offer a digital experience radically new customer can widen the gap ” , says Bruno Saint-Florent. In addition to this category, “innovative”, these small non-bank players who invite some specific activities, also dream of reshuffle the cards to suit the emergence of new uses: payment institutions, bank data aggregators , crowdfunding platforms in ambush.
E. The. and S. W.
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