Our recent survey of European banks highlights a number of areas of concern that have very direct relevance to the Irish banking market. The survey consisted of 294 interviews with banks across 11 markets.
A surprisingly small 8% of respondents expressed a view that further capital would be required following the ECB’s AQR with a striking level of confidence around this in Germany, while a further 19% of banks indicated that extra capital ‘might’ be needed – consistent with a general uncertainty of direction of travel for this process.
There are also some interesting views about the challenges of getting anywhere near a rate of return consistent with banking cost of equity – indicating a significant level of further restructuring being needed.
A considerable figure of 65% of respondents expect to see significant industry consolidation within the next three years.
Risk and regulatory issues, such as conduct risk and cyber-security are also highlighted as key issues.
Please access the full report via the link below.