According to the report, the decline in revenues and the austerity management policies have made entities take drastic measures on their own assets to balance results.
Low expected net profitability ratios are directly related to the return on equity (ROE), which makes 8 out 10 European banking retail managers consider that their entities’ ROE will be less than 10% by 2015.
Experts believe the submission of banking European retailer to “stringent” conditions and economic policies of the European Union is translating into an uncertain scenario in which financial institutions do not get desired profitability.
The authors indicate that the banking situation in Spain shows an “encouraging” behavior, given that two-thirds of the interviewed executives expect banking net income growth up to 2%; and an additional 17% of the senior management of financial institutions believe that the banking net profit will exceed that figure between 2013 and 2015.
Finally, due the problem of low profitability of European retail banking system, Roland Berger pledges new strategies, including tailor adjustments to customers’ specific needs, the use of Big Data for strategic commercial use, rethink levels of service, segment different offers according to the target group and be austere regarding both design and development.