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European Banking Barometer: Spring/Summer 2013 - Belgian focus

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EY’s European Banking Barometer is a bi-annual study to determine the views of senior bankers across the major banking markets in Europe. The research focuses on the current macro-economic environment …

EY’s European Banking Barometer is a bi-annual study to determine the views of senior bankers across the major banking markets in Europe. The research focuses on the current macro-economic environment and how it will impact their organization an the banking industry as a whole over the next six months.

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  • 1. European Banking Barometer Growing optimism despite a weak economic ouflook Spring/ Summer 2013 Belgium Focus " TI _ x _r _. 1 I I Building a better working worid
  • 2. Introduction Emst & Young's European Banking Barometer is a bi-annual study to determine the views of senior bankers across the major banking markets in Europe. The research focuses on the current macroeconomic environment and how it will impact their organization and the banking industry as a whole over the next six months. The Spring/ Summer 2013 Barometer consists ol over 250 interviews with senior bankers across 11 markets in Europe — Austria. Belgium, France. Gemwany. Italy. the Netherlands. the Nordics. Poland. Spain. Switzerland and the UK. The fieldwork, consisting of telephone interviews and online questionnaires. was conducted throughout Spring 2013 by two external research agencies on Ernst & Young's behalf. The aim was to interview senior bankers from a range of institutions representing at least 50% of the 11 markets, defined as banking assets owned. Interviews were not conducted with subsidiaries of memberlgroup banks, and a range of bank types were interviewed in each market to ensure a fair reflection of the industry in each country. The results are presented in an aggregate fonnat and shown in percentages. Please note that where charts do not add up to 100%. it is because participants either chose not to answer the question or selected ‘Don't know‘ or ‘Not applicable‘ as their answer. Where possible we've compared answers against those given in AutumnNVinter 2012 but some questions have changed or are new. We would like to thank all the research participants for their contribution to the study. III‘ - : . ‘ European Banning darcwiett-' — L: ;pri”g‘5umrl‘L'4 20 1 J
  • 3. European overview flanks anticipate an Improved perlorrnance over the next six months as restructuring programs begin to bear fruit. Although cost cutting and iob losses will continue during this phase of strategic readjustment, many bank balance sheets are new stronger. However, although increased customer demand is expected, lending restrictions will continue to tighten across Europe. Restructuring continues, but some banks are beginnlngto invest in growth areas. Regulatory oompilanoc remains the main locus for European banks, out cutting costs. streamlining and automating processes. and minimizing non-essential spend will continue to be amongst the top two priorities tor institutions ovcrthc next SIX months. Many banks now see streamlining processes as more important than minimizing non-essential expenditure and cutting costs. suggesting they are moving from tactical to strategic cost reduction. Redundancies wi“| continue to play a key role in cost reduction programs with 41% ct respondents expecting an increase in redundancies compared with 45% in our Autumn/ Witter 2012 Barometer Howr, -.ver. most oi’ these job wts will be part of redundancy programs already announced by banks. Sta‘! cuts continue to be centered on back office functions as banks streamline and automate processes. Over one-third at banks expect outs in Operations and IT, and other head otiicetunctions. However. some banks are beginning to recruit staff in key areas. Banks expect a net increase in staff in asset management, private banking and corporate banking divisions, where they anticipate increased demand. Opinions on thr: economic outlook. and the potential impact of the sovereign debt crisis. remain divided both within individual economies and across Europe. Fifty percent of respondents expect the current sluggish economic conditions to remain. The remainder are equally split on whether the economy will improve or deteriorate. This represents a modest improvement from our AulumnNllinter 2012 Barometer. when more than 40% expected the economy to deteriorate. Surprisindv. Spanish banks are the most optimistic about the economy. with 40% expecting improvement. Record unemployment and a seventh oonsecutivo: -. quarter of economic contraction in Spain may leave little scope for further deterioration. Banks in France and ital y are most pessimistic. with 56% and 42‘% ot respondents respectively expecting the economy to decline. There is little change in expectations about the sovereign debt crisis frorii our Auturrinlwinter 2012 Barometer. Tiiii-ty~frve percent of respondents expect an increased impact from the sovereign debt aisis Twenty percent expect its impact to diminish. Spanish and lta'lan banks remain the most concerned about the sovereign debt crisis. its‘ - : _‘ tzuropc-an Banxing darcniett" — :5pri~; ‘5umrrr; ~r 20 l '5
  • 4. European overview European banks will continue to deleverage and sell assets to bolster their balance sheets, but the benefits of restructuring programs are becoming evident at some institutions. Banks continue to pursue a mix of actions to strengthen "ION balance shoots and build capital builcrs. Fifty percent of banks expect to shrink their balance sheets over the next six months. with one-third of banks considering selling assets as they locus on their core businesses. Forty-five percent of respondents expect to improve their funding mix. with halt introducing New incentives to attract deposits. However. some banks are already significantly stronger. Less than 25% of respondents now expect their bank to access central bank iunding programs. compared with 33% in our Autumnlwinter 2012 Barometer. Almost 40% expect to repay such programs. Following recent M&A activity, fewer banks anticipate further consolidation in the next year. Only 38% oi European banks cxpcct iurthcr consolidation of the sector over the next year. compared with 48% in our Autumn/ Winter 2012 Baromctor. iollowmg M&A activity at the end oi last year. Future consolidation is likely to be focused on a ten of sme'| er institutions. particularly private banks in Switzerland and small Sparish banks. Al most three-quarters of respondents in Spain and Switzerland anticipate further M&A. Banks are fowsoad on right-sizing their European operations. with most -: :xp-acting sales or acquisitions to take place within Europe. Where banks are Iooki ng for growth opportunities. they are more likely to buy assets (25%) than consider ]Ot ni-ventures or partnerships (19% ). Despite increased customer demand, non-performing loans remain a worry for banks and credit conditions will continue to tighten across Europe. Banks cxpcct demand ior rota-' savings products to rcmaln strong. but savings rates will stay low. More stable oquity markets and a search for yroid mean more banks now zmtlcpatc increased demand lor personal investment products. Although 44% of banks anticipate increased demand ior corporate landing. they remain worried about non-performing loans. with 32% expect: ng to increase loan loss provisions over the next six months. Banks also expect lending policies to become even more restrictive for most sectors. Construction and commercial real estate will be worst hit. with more than 40% of banks anticipating more restrictive lending policies European policy actions to boost lending to small and metlurn enterprises (SMEs) are beginning to take eiieci. Twenty—nine percent oi banks expect landing policies to the SME sector to be less restrictive over the next six months. l‘I «I European Bamlng darcrrietw — 2:3prl‘g‘SumrTr;4 20 l '5 - I . _
  • 5. Economic environment 5 European Banking Harometsr— Spnn9'Summev2013
  • 6. The general economic outlook has improved most for Belgian banks How do you expect the general economic outlook in your country to change over the next six months? ‘ Autumn 2012 spring 2013 luv" . H, ‘ l _, ‘ 11 33 I0.8 £5 4 4‘; ‘ > ‘-ll -5 7 ll - | —i" Y H l . ,lv _ii r‘lI AJllI. l_I , u , .lr _Jl >‘lI _Ji ll , i;. lli -. H ‘ iiglw. l' 3, t l ,4 ill: Comments: - Comvamd to six months ago‘ Belgian banks have bwoome more confidant that the general economic outlook will improve over the next six m0flllI$, VI1ll1 only 11%. uxpeeclmg Iht‘. situation to worsen cornpnreed to 33% in Aulumn 2012. 71 5% extracting the Siluilllflfl to ii-main lhre same and 7%‘ expecting to strengthen over the next 6 months, - European banks snow the same trend. less banks expect In weaken in the next six months ‘Muir-3 mun i-. ;_~—. .u-u :4 r--xxx-n--u um -up-«us . , l l r ‘V’ Luluin . illD4ll“lI| ll 2 il , Hv W ; -;m . :uiim w , >,lt -
  • 7. At European level, the outlook has improved the most for Spanish and Polish banks How do you expect the general economic outlook in your country to change over the next six months? ‘ Autumn 2012 Spring 2013 J ii ' If I i'' Z’ '7' 37.5 " -' I :3 -. -eiiiiii '7 V’, 2i. u Ellizfifiw I ‘E : 35 : liiii 2_ :1: 20 E ii n is ‘if I u [| F . . a E I no 1' -. - 22 I 45 list T, ’ I 19 ii ii. 13 I 1' 13 I "m 'T ‘T 25 T i-. 'li>ll. lllL}: ' 1: I as 1‘ ~ in in T. do i. i ' '1 I 2; i i i 2' ‘f 14 : ii I" 6! I’ ’ ‘ fl-I I 15 I —— . I I 40 I ‘i = 6 I I 16 El —i_i, i [ I 33 u . r~. .iiiii : ‘I05 15 - ' J! I 21 L; v 3' E‘ 2. H El .1 - ‘Jl —ii iiii‘i. .i l - . -i — .11 -. —ii ii 1, . l.l, llI? ;. ll — ‘.1-—.1~= l~. ili' . i . ‘ie. i-~ i. l. 'ill. Comments: ' G-isnaral trmdirncy across Europe is that 50 5'. /ii of banks expect the situation to remain the same torthci next 6 months - SDQIW and Poland i| l'l‘. "'1I‘. two countries in whirji outlook has most improved comp: imd to Autumn 2012. with ri: spi~clivr: ly 40 and 31?". ol banks expecting like situation to stmngtrien - France t5 the moat pessimist country regarding general econor'ric outtook; 56% worsening ~imii. .n r1|= (l rs x-: —.m-in :1 mun-n: -i. um -in-i-xii . , l l l ‘V’ Euluin . illD<ll“lI| lI 2 il , ii~ Vii : -Lill . :uiiiii i- , >,li -
  • 8. European sovereign debt crisis 8 European Banking Barometer — Springlsumrner 2013
  • 9. Sovereign debt crisis concerns Belgian banks What level of impact do you think the Eurozone sovereign debt crisis will have on the banking sector in your country over the next six months compared with the previous six months? ’ Autumn 2012 Spring 2013 l1‘i"-- , - w. " i , . " . 11 ‘ “I5 “.8 L g 1 5" ii i . ' sir i _ l 9 B ’— i . iii , lili’i . i.i ~ . i -ziii. -i. i ii. ii‘ illl‘ [lill‘ L m ii’ i iiii , Wit‘ < ~ . i -r'l. |ViI’ll ~ iyiiii vi . i i comments: - Belgian banks are more concerned negardi .09 im pact oi Euromne sovereign debt crisis than in Autumn 2012. Six months ago. 86% of Belgian banks expected a decreased impacton the banking sector while only 285% expect such impaa now, Today. 35 7% at Belgian banks foresee an increased irripaclon the country tzanlu 09 sector compared to 171-‘. six months ago - Europmn banks remain simdy on the impact oi the sovr-rnign debt crisis on their banking snctor ‘ILnit. iu-I r1|= (l rs x-= —.m-in :1 mun-n: -i. um -in-i-xii . , l l l ‘V’ Eululn . illD<ll“lIlli 2 ll , llr Vii L-Lill . :iUllill i- , >,li -
  • 10. Spanish and Italian banks remain the most concerned about the impact of the sovereign debt crisis What level 01 impact do you think the Eurozone sovereign debt crisis will have on the banking sector in your country over the next six months compared with the previous six months? ’ Autumn 2012 Spring 2013 ‘iii 1: 1' no ’/ lilil ii‘ in E :1: 12.5 ti»-ii} . u 1‘ so I ignigmm If L; 23,: '. .i. ,.. r 9 § 1 11 [1 iriw V 3 3' It iu I1 r u 25 T I I1 [1 r um I2 Y I 24 L] Lwrrrcim 3 I I4 _ i 5 I I! v is 2 I n 1 V‘ I L’ a Z M *'« '1! ‘I 20 T M ‘ I. ‘ ‘Z «I I‘ I is r n f I an 6 ‘J1 1‘ s j Pni VH1 23 E I" 2: 7-imw I5 ‘I 22 ‘Mr W is I I 9 ‘E n. i': - VIJW1 A I T 22 ? .-mi: -'iim1 7 I 10 3,5 i‘y' 1' j 9 . w- a 1 I as | iii _‘i| 'i{' -. . 1 'i' r u*3|i~, ~. -n w '1 H gm‘ ‘: .-. in ii-- 1 . imr, - - ~ ' -‘winiw: ii, .1i. » . .1 v: comments: - The Nether-iands is the mostoptimistic country wmi 40% at banks foresee-mg a decrease impacted the sovereign debt cn sis. - on the contrary. Spain and Italy are the most pessim isi ones with respectively 50 and 42% oi banks ioreseeing an increase impact of me can crisison their banking sector ‘| u<riI. u-I r1|= (i V‘ x-= —.m-in :1 mun-n: -i. um urinal: -xr. I . , i i i ‘V’ zuiuin . iiiD4ii“iII'I 2 ii , uv W : '‘}i‘‘ . :iUiliii r- , >,ir -
  • 11. Business outlook and focus areas ii European Banking Sarornc-ter— Spnnqsummev 20 i 3
  • 12. Belgian banks are more optimistic on their overall performance How do you expect your bank’s overall performance to change over the next six months? ‘ Autumn 2012 Spring 2013 in‘: irri : as in " ii iii gr : 'fr-‘Hill — a ciiir. -nu I —ii aii-1 'i. ‘; :ci. i — ii-— -»ii iiit, a. 'i‘~~»mi. ~ 'iiil‘. comments: - Confidence level of Belgian banks increased slightiy. with a remaining 50% of banks expecting to strengthen and 39’! /. to remain the same while six months ago. 5096. of banks expected their performariceto weaken. - Europe confidence is also slightly lflD’B8SIl’g with 53% of banks expecting to strengthen compared to 37% in Autumn 2012. ‘IAHILII1 r1|= (l V‘ x-: —.m-in :1 nxul-PB: -In um -inn-ui 4 Vi l , i ‘V’ _ pinup . iiiD<li“iI| 'I 2 ii , iii Vii : -Liii . :uiiiii i- , >,ii -
  • 13. At European level, Nordics being the most optimistic How do you expect your bank’s overall performance to change over the next six months? ‘ Autumn 2012 Spring 2013 Aiiri I I 12 Au - . 12.5 1' I as » 3 so hm ii I I 14 5' I-_7 I 21 E] i 1.5 IE I 14 3 iiiii 4' :1 I 2c [1 iii — 4’ ’f I is ‘.7"’lliilll, 2‘ I 33 : ' ‘. :V‘l'l iiiii I 20,3 1,4 I ii i: I I 10 ii 3 N ' iii E I 15 I I viii o I I 14.3 I 6 I I 4| I 2»: IV‘ 7 5 H 3-i’ii'ilii 21 , .i. i : i i 4 I : rs : x.ir; -iI. iiii1 "3 i. ir E 2 9 i_t'i an ": ‘r~ni1~i'iw 2 2' ' 2: "ii, I E—'mri'i: ~= - : ii—. ~i. Eiiq was vinw '. ‘i-vii . — il-1"l‘. comments: - The Nordics are the most optiinisticwttli 78.6% saying the performance wt strengthen - while in some countries we can see a srna" of banks expecting to weaken signilicantry. the overall oontiomca of European banks in their performance is increasi ng compared to six months ago. ‘IAHILII1 r! |=(l I" x-: —.m-in :1 mun-n: -I. um -inn-ui . , 1 l l ‘V’ Euluin . illD<ll“lI| ll 2 ll . iii Vii : -Lill .2uiiiii i- , i.li -
  • 14. Belgian banks expectations on LLP are improving Over the next six months, what do you expect your bank's total provisions against loan losses to do? ‘ Autumn 2012 Spring 2013 mg. a a iiu 4} ~ 3; ‘ii N 12 » ht ‘ ' ‘It I '. i i it 4 , t L ‘ E: »—h-git, Eur: Ir EH! mm’ E, ', :t— iw y. - 1" », u]iH'H t I . -| n H‘ 1‘ ‘Mt; "i, —‘m' m V1‘ W. » 1.1m ‘V“ V‘ 4 ‘i. ILitt . ‘.« M ‘u mt t, comments: - Positive expectations from Belgian banks regarding loan Ioss provisions with 29% ol banks expecting u. P to increased against 67% in Autumn 2012 and with1-wit expecling to decrease com pared to 0%. six months ago. - At European level. the growth In LLP is abaitng. 32% of banks expect to have to Increase orovlsions over the next 6 months, comparadto 44'/ it oi banks six months ago‘ ‘rm-m-. ruku rz x-: —.u¢-ux :1 nuu-I'n: -In um -nu-: -ut 41 . , V , V ‘V’ . Euiuin. iHi: uH‘<iIIVl2ii, Hv"‘ ; -Lin .2uHmt- , >,it -
  • 15. The largest rise in LLPs is expected in Spain, where the economy has contracted for the seventh consecutive quarter Over the next six months, what do you expect your bank's total provisions against loan losses to do? ‘ Autumn 2012 Spring 2013 e "iii 10 2 ac »«n«-n- ' I T_ : ‘v‘| l.lv 3' ‘f F l‘ E E‘ I4 Lliiupu 9 I I 11 E ; U V A I E 12 E] r’ l 7 I I is E] m it ; I 12 J l l l . 6 I I s [] min my I : 14 Q i I8 I 1' Z’ I] -. __ 9.3 ‘ll r to 1' *’ an 3 I 3.1 r in 3 I : II J T 143 Z}: i ii 17 Z : :3 Z 23 ‘; -mun 19 I I 7 1 I a ll lnnl I : ' 4 1' l, - :4 W 1' T 23 I H 3 mt . — — rim ll -. -i- —< ~ ta, ‘— mt i. vr—lr we 4- Iv-at — gm t, -13.», ~ » —, tqmm mt comments: - While In the UK. Swrtzeciand and Austria wrrteotfs loot: to have stab: iized. banks remain worried about loan losses and more than hall of the banks In Poland and Spain expect to increase loan loss provisions in the next six months -n. m.m "mu i'n ; n~—. uu; ._. r :1 Mlprnrit . .r. a nllno-NI . , l l t ‘V’ Lulup . iHl: ull‘*llIll 2 n I in '~ ; -pit . :unm t- , >,lt -
  • 16. European and Belgian banks are now becoming less reliant on central bank funding programs. .. How likely are the banks in your market to be engaged in the following activities over the next six months? ‘ Autumn 2012 Spring 2013 ~ I « t to T ‘: '2 El « I : vs I ‘ " ‘ " '" ” 17 2' I 13 I lit . : us 5.5 l t t in I "' 13 Q 9 : ' E I: Q I t t v t r u a I F} 11,5 Q l . it > . o 4 87 '2.1 —~ l H > l~ — . 10 ‘_' In D 7.5 II J l y l l ll‘f"l a E :2 ‘ 7 : ta 4 » m r 7 E l) I 1 _ I6 I ll l . t I : 29 -"I A 21.5 J l l l l ll i 7 : ‘I’ 14 ' 5 I f 26 3 ma’ ~l, may. 1- Elli-, “l. rim .1-at r-l. 3’. n'i ‘E. l|v'}Il‘l‘, |. - , «. ‘Elam ' "‘l, |. r comments: - Fewer banks now expect to access central bank funding progams. and 40% are looking to repay such funding. While it IS clear that many banks are significantly stronget than six months ago. the restructuring of the sector is set to COTIDHUE - 50% of respondents still expect to continue shn nkinqthelr balance sheets and to improve their funding mix. 'nmm—. ll no In t-x~—. u-ms u I-<I; u'ILt'tA um lu~<l: n amt. out -1; sun: Atu. lnI-4|-es 1x[. V'. I'IlAL ; m.u- ms rwcvflq LVd'| 'll mm mun. yvzgrnxll lulu Amtumw nu. -:u Isaur-Ida: in 2" Lululn . ml: Hw<ll: vl 2‘ ll I in ; -Lin . zunm l- , ‘lI l I
  • 17. .. .but they will continue to shrink their balance sheets. .. How likely are the banks in your market to be engaged in the following activities over the next six months? ‘ Austria Belgium France v- w 11.5’ I I7’ 7* I: f 21 In _, "' T 2] ‘ ~ - ‘Hi 37. .1’. 35 '4 . I I M ‘B I Z I] ‘ i i ' w L : .. 1' 14 In __"' 1' an l . l . i vufifij H 31.5 IE TI 7 12 T; 12 [1 ~ « < ~ ~ v ' W :7 1' f 7 U‘ I T A mm H l l l 1 as TI! 1}: 2!. zu an 1' : An . l w I. ‘ Z, 25 I 1 >5 "‘ I " u l . .1 . 3 ; so 3: L 29 Z 12 1: : 10 < r [113 1' 31.5 L‘ 1' 1 4]: T as . . l . l . 11,5 : ‘j so [I : 51 3 I : I2 3, Germany Italy ‘ i 0.5‘ 7‘ 1 12 I. ‘ It? FEE 1. um] . s ‘I 3: 1 5 2.5 1: ; as ‘ c°'". m°. "t‘: . 1 _ “ - Belg um Is iollnw-ng European ‘ ‘ ’ VI A " " I‘-’ E _ - "’ lruend .5795 ova. -,xgmn hanks ‘ ‘ ‘ ‘ ‘ " 15 1' 13.! I _ '7 expect to reduce access to l 4 l r l u 1']; 1'' M Jr, J 11 central bank lmdmg. and 50% H , , , . ; '1: : go [1 ' 1' j . expect to reduce lhalrbalanca ‘ . ‘ ‘ I 5 U | I —— 1- shnnl andincmnsc inc: -nlivclo ‘ “ F 1, : 2“ I E : I uncreas--cuslomev deposit ‘ 3’ L F 14 I2 ‘I. so T . . x l l l l 3 ’ ‘j: X 19 T " 11 l. . l . l - . . . ‘M--Iva». myrIr'4-[-*ou. v)i T'fn7§[IA'l'I—'llIiIIN‘l'I" tuvup. mtLn‘<iIIIlfin~, rww : -rm .2uv1m ~ All : "
  • 18. and improve their funding mix How likely are the banks in your market to be engaged in the following activities over the next six months? ‘ iicnucing in tmlar(e Shnfll S 03 3 s. 1. . . Ni: -34. -ii-m. .o. m.m. .m. ... mm. ... ... ~. i xi 2! R»1xr. :mr Ki: an: -miirnicr. in 29 ‘ ll 1: 17 3 3* 5 -N--W’-"9 "ii"-W '>v'""'"' 3'"-I" -" 2‘ * "V 5‘ fiz- mcaunq : cuiui barn nmanq irnaianis m 5.7 i) Sun: -ng train; turn wvriu-mu raped -nvi-in 4 I ‘HI ‘I 2! So ml asset: .uism-. - mu--< rmmini . <—ii. -., .. ... a xktv r: ..». ... . i. ¢r-: m;i ). (n5Li: mer'. - L. A. -., ... .., .., ... . m. .m. .., ,. ... .,m. ... A « u . . -. .~. . - uedmlui Smitziurland UK ‘I Emu: nu f-2 LIll'IZlz sr-: i:l 41 ‘1 ALI 22 lnvvfl. -'-~7‘"'"'>W>: r«-~m~, --, VJ . ... -em 2‘: 2: m .12 “'—'6"? '": i '05" V‘ W“’*' ""3! 3" -"- I -o_. -my Imrnx ki utr-nlh imzqm Ru? -'llI‘I, 'i. nil1-IILVIIID ll. mIn_: pt‘. -yiru. ' stkrijlunlilqlliznintla-2124: Lxmi mamm s<iirq as'. e:'. amine r-cm ma‘. ct . ~;s4iw; anal-. outside [in-tcv: L u -’ ». A i. F‘ . .. a L a. 44 :2 ms an 2 “ . . E . . w*~"a '0 = -"-"-"- " * . m, .-u n, cuiilml an «rum; ;m_1um -.1 «- .44 IFA'| )ll7|iA‘llu llllllli Iilgillu lmlu I 51.1241! l'>. AAQVIII1 I 5.I; 'l"I nah qiii1i. wi1y lun- -Mmnnmiim-can-omqooimm-can-mmwua 18 European Banking ElaioIneier— $pnri9‘Surnme1 2013
  • 19. Partnerships and joint ventures will be reduced by Belgian banks Which, if any, of the following is your bank likely to consider over the next six months in relation to the countries in which it operates? ‘ Autumn 2012 1 rr tr r Spring 2013 F1 1 F 1' r. ..r. rr. . .11.. rm. ..- 3.1-my--, r.. r1umr. rr. i . r. v iii . . Comments: - 32‘. -’. of European banks expect to sell assets in the next six months — in line with our Autumn Barometer — Will! targeted sales oi srna‘l books rnostlr Kely. - While Belgian banks slri‘ consider to se i assets, with 21% cumparI3dlo17% in Autumn 2012, the main change lies in their Iiliulirwcss lo significzniiy mducr pannnrsslizps or joint venlulns (7%) 50% will not engage in ihi-xi: :x: ii1nIi«. ~.~a comp. -m-d in none in Autumn 2012 -11.1-1.11 nnmiw. ;n~». u1;. _.: :: ~u; ..-n. ri«. .r. a nilno-rut | ‘II{v‘. II9IUl : :-. i-tulrn mm run :01 :11.-.111 : I zuluin . mi: ‘.uwrirvr 2‘ ii , Hv rw ; -err . :rUllill 1- . ‘>, l1
  • 20. While more European banks are now targeting acquisitions Which, if any, of the following is your bank likely to consider over the next six months in relation to the countries in which it operates? ‘ Autumn 2012 Spring 2013 s '13 so ‘fl I 1o . . as 75 ti min 17 I : ‘i ‘ 21 T ' so i . ll‘I[l 1: I : 14 i :2 ' E i'_ 41 1 :3 Z 3' 22 wri» as Z : 2: , — ll! ‘E _ 52 ‘,1I"ill 29 1 ' oi I , 3.51 2i! ' , SD 17 ‘Ju“1»-rl‘i’i‘: 3n E I 15 ‘-l>vl"- W: 30 I I 50 r. . 22 I 1' 43 ‘rm-, ii A 4: ' -_‘. J '1 4: ti vVl'i 11 I 1‘ :9 >= iii. mii 1'5 I T 51 ’; i ii 52 I I 1 '— i 5: I I 16 ; .: .n-.1 -.9 17 [ 52 ~ 11 I I 41 > 55 I I 23 Jr. st 2! ii 2. 1: - E. ii~, l' : i 1: F'»1F'Fii ~ ,1 Vi . . ~ii~ 2 iiriii A ~i~. -, Comments: - The difficulties of trying to iind a buyer for large operations, at a time vimeri most banks are still looking to boost capital levels. have recently hmri highlighted in the UK. Hovwrvnr. some banks are now orzgi-ining to focus on growth opporturiilii-. s.with 25‘. -'1 considering asset purchases. compared to iusi 18% six months ago - European banks are focused on nghi-sizing their footprint in their home markets. with the vast majority oi asset acquisitions and disposals anticipated in Europe. -n. m..1 nnmiv. .;. .v, u1;. _.r : lIV1Ifn'fli'lls-if-1nIlAm‘IlI| ‘II{v1IfiIlll rt: -rtlrirrl mm hlli rna : ¢«i-.111:-1.. -.. i.. i. : i.. » 1-. .. 1.. M: .1-1|: vrm 1r: In11~3:n1ui( mum; r. .-it-. .. 1! 11:1 ~t: tr.1atn . . 1 . ‘V’ _ Eulup . illDill“lIlll 2 ll , lli iii ; -Lu . :ruiiiii 1- _i, li .
  • 21. The restructuring of the banking industry will continue, but fewer European banks now anticipate consolidation Do you expect significant consolidation of the banking sector in your country? ‘ Autumn 2012 spring 2013 mrw mm ‘l_l 5} Mil l NJ I 4 l 11'! ’ 47 ~ ~ 3: 1 l 1:’! 0 U E ’ ill" Eurnpc E ' Hi" Ellrflpn n«- Lmrl -“i Comments: - Expsclabons of COHSCNUBIIDR have moderately dedxned across Europe. lollmving recent MM achvity. While 100 ‘F. at Belgnan banks do not expect significant consolidation In the banking sector in Belgium. same as six months ago ‘Ins-mu mun rs x-mm-u :1 mu! -I'n: -h um nuns: -ui . V! l , l ‘V’ . zulup . m:uli‘4iIIvl an , w W : -‘, M . :uHm w , >,lr -
  • 22. Switzerland and Spain are the markets most likely to see consolidation in 2H13 Do you expect significant consolidation of the banking sector in your country? ‘ Autumnlwlnter 2012 sprlnglsummer 2013 ', rl>. _‘ 10 I : ‘ll“‘ rll' 37.5 ii, .i. i- ‘ If ’ 2 i. , 11' Etllllpv‘ :1 _ 2'-_ t iiii ii as f H 3? l i u I I r - 36 I F, ‘ ‘Y 34 T — . 44 ' ti . 41 I *- . 11 , I r. —ri. — :5 I I J ti ‘ I I r, i- iii . 43 if ‘I mir 1! l— 41 u : 2: wiilciiiii 1: I 'l 1| 2 iii iir 1: I T . .i . as [I ; .-. iit: i. i. mi. : 12 Z i i 9 f 1' . .ii. 14 :1 mt 3'-rii -mm. -‘J l Comments: - whll1.'l‘. K‘)(fC'-1u0ns at consolidation have moderntislydudinm! across Europe: this tall if; most notable in Switziterland. which saw mergers in "It! private banking sector at the end of last year - Nevertheless, 72% of Swiss respondents st: I expect ftirther consoi idatiori as pnvate hanks struggle with declining profitability. due to increased compliance and IT costs and rrwcenve pressure. Following recent bilateral tax agiamients with the UK and Germany - In Spain, whm: thn Fund lot Ordrrly Bank Rvstructuririgis reshaping the banking landscape. 72$‘. of rnspondnrils arvticipatn lurthcr consolidation ‘Nun! -rt lulktl i~. . . ... ,.u. .,. L‘ '| lI[ll‘| )l‘ i. ulni . ... ~». -.«i . , l l l ‘V’ . . zulup . lllD<ll“l| |lI 2 ii . iii rii : -Lill . :uiiiii i- , >.li -
  • 23. Business priorities and product line expectations turupiviii tj: iri<iIri_I : lJii, iii Vi. " — : -|, iri’i, ~ jur1iii'r-‘. ’L’l ’i
  • 24. While cost cutting continue to overshadow the growth agenda, innovation becomes more important to Belgian banks Rank the importance of the following agenda items for your organization‘ Em, ” eeigium . .. an . , r . . . . r lli ‘ii an. l‘lll 'l ‘l i l y‘ _ 54% ’i l . l l l H .5,‘ ll in am iii ii- i ’ . l . were i l . . i i. . . l ; .i i, . 45’. l . ii i i aim. ‘ l i ii i lli ii‘ 259; i i ii i - lltrliilt l 1314 i ii i irii. ’ T34- i l'l iii ti’ in 12¢, i . r l'i i ii. i'»l' 1.l' _ ll i l i 15-, ‘ iii v . l 14. i i m in ’ i" ll ii it i. H. .. H .5,‘ _ . . , ,. 7- , ii ‘ “ ri * , ill 1. . it . .. 16% . l l i ii i. .. , ill i. i,. 15$; 7. l B tr, Ill . . . i i . 147; ~ . . i i i i ll. ii '0‘-'5 Comments: - European Banks continue to focus on improving risk management and complylngwith a wide array of post—orisis regulation. - Cost cutting also rcrnains a critical .1i: livity, as banks attempt to improve: thnir bottom lint; in a lowrcvonur: growth nrivirionrnent. However. strategic cost reduction, through process automation. is now more important than short-term cuts. Bdgian banks rank cost cutting as 7th item on their agenda while European banks rank it as sin Item - Even the innovation and growth agenda appears to be driven by cost cutting. wrtri 36% or Europmn banks and 43% of Belgian banks. bsdiemlng it is important to invest in new custornenfaciiig technology, such as mobiIe. which has the capabilityto reduce branch oosts. However. with reductions in discretionary spend. banks are unlikely to invest in other longer-term cost reduction strategies such as outsourcirigor off-shoring ‘Vin-an nu: In : -u~i-w cl i-um: -in nu: mu-: i: .~. ;rm. «r- A-0 sit. -1 lri rvk We-| 'I[I‘o‘l! 'rn myui. -t m y -nib . .- rm -: imun Vvwnll ml y M int-wlvrlaod in means or, u. m—. yii v-mwr; y;- mu-iv» : Vf(IZ(14IIi‘W'! ‘ii’t7‘IW‘i ! P0¢1Il;0lVv"l 0 rv in .1 turupiisiii Urili'iIl| _l fiiiii, hi hi» — ; -Liii ; Dulllll l‘ . '>. 'H 7:‘,
  • 25. Although short-term cost cutting remains a key priority for many banks. .. Rs--ivaii-94-iikn B cost: -.nIrina-io. m Rank the importance of the following agenda items for your organization‘ -i--i--i-mi --I ii--mt j Belgium France as; -.. ow-uni Y3‘; 51% — ATV» Svolriric-r-) RH. 33% D-omu. ,i; r3nd I 75% | lnln; lv; rIi‘~tHIuIriA mu--non. m soar. can-mm; 7:1. | :t)l1[lhl'L¢wI'Ili. ».'fu; N¢1rtulslltlkflvflillul 71% N or :4 i: :nouv. —. am -«mar mater -. iii: lwllflfl ii Kt-uxni-I-hrJ<qIudr'flrl1l 5 RIilV. L1ul‘g1Iut1.| l‘u:1brsl(luI) — 141 LN--wwynu. i.u—gi-. ~um. m 2 tn. zmuiirmnqn. nIr. vimimmin; irr: s = In i-. ... ..; ..; «.01.. .. . ..t p. ..a_i. ..n. .. in en. ..--q. .=. :.. ... .. t,m. .s S mi. R: -s‘tu.1;Ir-qrotqtarunit»iuii: ry»fli~qu: .'n; rt. — 14$ Dowro in mm-rvxim mi you turn nu. Ivvlqn flmthhhrvwszm tmm ow -war --us =1 mu. ..- V91 II IJIl‘1CI. lII)|0lV) A(-); l'git| - muls I1[ll§'W§9¢5 at-sun-i; «immune ii. -um or undid: on '-htdiu § °| |'| °°I 5 E5 3 3 3 5! am no-a. ,.m--r . ’-E1-nlllWi"| 'I: ou-I Fltvlllrfltt ear. .. I Ilnlrliltfirne-o-anvil! l‘ll'l‘0IIrI aim»; was I 3 2 :1 rmii-~« "'W""A"""")| """"""""""vfl L Jr». m an . ,,. ... ... ... .n i. i.. .t. i«. .m. =.. j ms T «is ""“"l"‘ """-'-lv‘"r; |-r""4=v. iv Z in m u-ii. u -4 7' a. .ir. u.. i-g 1-. I. .. III i. uni um. DE-: t)£uyfl1))u . .- V06;'n ’. 'uvwv| (lIllO<IIriIv—InllrI: iu1IvyPIL‘$ L)-um "1 Ramp-v av-1 = z~s: i.Im sir; I! it‘: '| 3 3 E I: 3 E rnruru-n-quantum nqviui-st — 27% Heill|1lAfl'q‘lIe| :l11Iv‘n| : . uvo, .n. m;uuu-5 1 11% m 27% Jciwoac-I-It-viaiitiv-iI«I9irIi~h-I‘l-i — l8 — 55% Muini; iimn. msimi. n.r. m.iiui - H T 8'4. . ':hpraJ-ijnluaaltrttnusuu-1 3 77. T as Vviltirunirdlullyilelvi — 5% — MW Airy. -ui_; n-~wt. m:: t¢ii-vviun-n I 3% _ Zlfi Chbulu e m 4591. Er-1lI'0I1:-Iinhtvilprofi; . 1 In j in LIL--u--o 1 7% j 14% Noni-i-niurhcih-—ia«-uri-use-on-on-muse lbnwihinvnirdoodluilniiulllovtuiiuoleslvlluueosdudlllu Ootinhueornrciomletitlollalu-diorriounuuyluuuud Forurmwstiwwflwlvwiinuialraouiarruulufitigodurl Darin 25 European Banking Barometer — Sprlnglsummar 2013
  • 26. . . more institutions are now focused on strategic cost reduction through streamlining and automating processes Rank the importance of the following agenda items for your organization‘ ram W-II. t)tflo‘l 51:. ..-. s«. «‘, m.u—x. u FWONII; m Bar» - u. .m. -.. ;:. ,- awn. ) n-(1-'t1); IV, Inn": mm r. 'n(u)Iu-n mu -ms. rv-- looam-4.»-«en: -.u -: ._no um: Ml Ac-ui mm worm mung u nnhunr nw. Ju-w Rn: I.rnn'g1-I ru «. .- DE-: A)iugfl1V))u . -.m~uu. y-r mm-mmrm. ».. n:s u-«mm: .- -en Nnflvnunnfilms Em an-qn. .. ms nu-. -my--all! Posru: I.-n)nm I-nnusvn mun, an. mplvlzrrb EI1oau»; pu1'«-lip: .-q~ mnoam», xv. |: m}n w. w:os»m«um. n.~n m zwmwm own; :4 tusnent-5 an mmrv, -rnw -mmv-s r«u. n-cu. .. as! -1| n mm-q-. -. f| .I: uriny mu. --vg mmnnu :1 mm DIV-rm-9 my m. ..; uum. Slvvar-vtvamreva-9 Wicm-ah llluol u M1umb'gn: A><rnIIInl«cm-Into man: mm '. =nunII. nM 7.. .-. .«. .u. um. ~m. .a. nuu Ifmvirl . .mnm¢ rvunu n-1m-um lwnlnp nunl: vuwlu_1tul-Irma" I= o-. n.: n.u. ; ro mwm In an mm nmdutllii mu rumu n rm. -.4 uvx)vuI5'RE( nun-. p.-q M-. :«-n manu-numn-u Emu sluvrnva Lusufi/ .'A; Ivn'l1 Rn1I~rhIn)flr KI)! '|995InrnVI[i1MI| Ivqntlzt-1 Dru: nun; yu| -unlv p. .. .n- n: «du: o.1 >. -a iron, ‘ rr-5-xoaslrlwnnrunluuv nu-:4-n-u: :4 am. a' mm. -u. .. VIDA tom mum '. r.1M-5 A. —., ..u. , —u. .. an 'hAllVIlJoII an-. «:. ., Lam: »; :2. ruuhuv rmI. nu ul num; wan--nurhcm-—= uI: uuvr-um-an-u-mun: Ibnwhuuvmrdoodlurlnvuulllounuvnvdorlvllosuuouludlllu Nmhveomtcilmlulitlowlalu-dlnnuuwavyuuuud Fowumullcwatnlvwoolwldrvnaufimulufitogoduvl Dana 26 R at -"6 ‘~91-“kn — Cast t-nmn mu m ». ... ... n.-. . and . ,.. ..«: < T ; "|| I|I| ||| ||| ’5§s 3 gs ggai European Banking Barometer — Spnngsumma 2013
  • 27. Banks anticipate an improved outlook for most business lines. .. How do you rate the outlook for your bank over the next six months in each of the following business lines? ‘ Autumn 2012 - Europe Spring 2013 - Europe 14 I ~ 1: | I ' ‘ “ ‘Y4 '15 , p , ‘ . 5 ' u _ i i 1: T I! r ‘ 1° “ “_| i II to I v ‘ i II I! 1 5 - in IL! rt ‘i 13.5 n s r u _ 4,5 ‘ * 16 2.5 i i J t 20 , l l i‘ i I5 '1 ~ 14 I 1 4 r 24 . . i 4 21 I . ‘ 4 I 19 n - M l .1 i , l (,5 f v 16,5 :4 u. .r~, i; i.rii1 - F’ »i, qrm ‘iv? ’ .7 nri [ififll F-r — , ;.rrr . ‘-, i-rv. pm: Comments: - The outlook lot the nisxl six months is most positive in retail and prlvalee banking as mill as deposit taking Homwizr, altnr :1 charisrigmg 2012, the greatest improvement l5 for investment nenlung ectivilie-3. Over 25% ol respondents are positive about the outlook for M&A riopelul that with greater economic stability cesh—ru: h corporations will pursue new acquisitions, Further. with me European Central Bank easing credit spreads. banks also expect an improved pwlorrnance from their debt Issuance and trading businesses. ‘M4111-1rI0¢tlI‘i i-. »,. «-1. Ll . ... ..-ii. -i. ‘OI: .. ..--. -i ln lLIe'lIN4 is. .. i. ..; .i. . : i.. .ic. n.. ».. ,m. .ii an: A-m ii. ... .;. .i. ... .m im. :.mi H i». . . t.. ..m. w n. n.i. .iu : l zulup . lllEiill“l| IlI 2‘ ll , llv Vii L-Lill . :iuiiiii i- . ‘i. l1
  • 28. .. .with the strongest performance expected in deposit taking, retail banking plus wealth and asset management How do you rate the outlook for your bank over the next six months in each of the following business lines? ‘ Deposit business Asset management '2 ' IX i A I LY 8&9 l ll : 1 r i u ’: n It 2'1: 115 l is 1. II n 1) ‘J! ’ - n t! 2' :0 u c l u «.1 tl. | .5: - It 10 11.! 11.: t I. 11,! as 5.‘ I4 I a i _- Tr * i 4: r - TH‘ , n ' ‘If 1, as 1: 1 ' I: III I T :7 D Il, .I I’ v r (I an '1'‘ ’ Ti‘ v IS I! ’ 15 (I i to 5.‘ 14 ll an. “ “nun Prlvato banking and wealth managemi-int 1.’ u :1: 1;’ in i as 2E n 1 _' I ll ‘ - In El II F u It I T‘ II n l so I 1; . _ I t 1 to H 2! In 7!’ i 1!! in: in V 3. : - no as T J i u 12.! TX. ‘ "' '1 I u l I: 1‘ 1 T u 'l N I it i _'»1 , a l i $1.; M ' I > .7: . 1| , V as ' n i u- l -1- iirn. i’ . ' r-Ti’ i-m1.~ it I — yr. ' Mutt: -.I runner on young. =1 i--pi: -is-u urn -i-no-it rmmuniu Haul us-s nun 9-ri um ofltom nun: min an-. uni, nr. no: .p it. inns an Ill imsmauni -it-«in; D1-I mm :1 usngaguixiui .9 lzurupu. -‘ii1 tsan-. ing : $Jl4_ mi hr — apri aurrirr L" . ’i; l l 5‘ '
  • 29. Even the investment banking outlook is improving. .. How do you rate the outlook for your bank over the next six months in each of the following business lines? ‘ Corporate bulking Securttlee eervlcee Eu -. ------. -----. -----. ----—--------------. ---—4 L---- --. -----------. -------------------------a W‘-7* Elluhv 4 4: "1"" rmim A ~ A] s-vi---vi i; ... r.—. i. ~ not 44- .4: iii. :4‘ 5: ‘M-r-m» Ie: lIttLl'vh . iii ii ‘-“"'- Muses: In in NM — «-um 11 ‘J i: = 55-! " 5", , -~ ~ .1, 5~“<‘v"““’ . -,-. -mum xi W ur ; : 4:: Debt and equlty Issuance sewrltiu trading euiiiava was niiymmzs ~. -in is I/ ‘cry good than; good INer. hi: r good not not! - Fart_. - pour . VEl'y' pocr -Mniiionnllutnp-«suing. urmno-e-acne-nu-can-noun-mianumativunnnunoaiaot n. —iuu npiuymi-«qunnm. oi-in-um-n-u. ¢»g nan-n «uuwnanu 29 European Banking Elarocneter— Sprtnglsummer 2(ll3 E -<
  • 30. .. .with banks hopeful that greater economic stability will boost M&A and securities trading activity How do you rate the outlook for your bank over the next six months in each of the following business lines? ‘ Transacuonedvleory ii. 17 T to ’E o 4.5: :3 _ us I 13.! ‘FT an "N 6 ‘ E 2. u A - l ‘ in i It It " n T‘ u ) L It 2) ‘ I ' u wt ii at l 1 i -‘. —ii. . . » pl. v. ii_ _ l‘. ‘>—<‘, ‘r v Comments: - Clear positivc outlook on corporate and retail with nzspizctivoly 33.5 on 25% cl vnry good rating Ior Belgian banks - weakest punocmancn is axpnuna on debt and equity Issuance with 5076. ~ mun-ai riled 1-. t-walla: at mu: -n-in uhn Iuuvu-1 I‘IIOI: lI‘kIII m. If um: nun sun um mum nuuui rut: ttutway VII. in: -| 'l i. -. ll'fl- .1»: IIAN-vnfllirllhlltfldn‘, rzi-I cm : : M= Irnr‘-~¢: M turupmiii Udllvllllrl fiilli, ii, Viv _ f. ILlH ; Dulilll V‘ . 'i, 'H in] i
  • 31. In retail banking, demand for savings and investment products remains strong. .. How do you expect customer demand for retail products at your bank to change over the next six months? ’ Autumn 2012 - Europe Sprlng 2013 - Europe r mm 9 l— 15 i ~ «» c i « II I ». .« . i. s - 1: i » : in 11 ~ ~- 15,5 ~ . ii - ii I h 20 i r ‘ 7 v 14 l l 1 . 20 rt > m i 3 V 1! L1 l . : ii A -v to rt »i «ii 4.2 ‘~ l. S1.6 i’ r. .;, «.. ,. ‘i i in , Ii -i r. .—. :. —‘ . ‘ —i, ; 1, ’lin. :; .m. . 5.. r. .—. ».. in. «[l>~i' »1'»>- mini ll 'i'i. Comments: - Retail customers continue to strengthen their personal balance sheets. As a result, demand (or savings and deposit products is strong. However, low interest rates on savings and more stable eqxity markets have also led to a dramatic inueass in demand for personal iivv-sslmentproducls, as rr-lltil custom: -rs sunk higwr yield. -:, Banks also antic-pate glightlymcrmsa-d dn-. ivi. -md tor pt-. rson. -il n-. ;:i «stat-. lending Mongege growth will be strongest in Germany. Italy. Belgium and the Nordics. Mortgage growth may be stronger than expected In the UK. following the govemmenrs recent II'IlrOdt. tC1IOt't ol the "Help to Buy" initiehve to help first-time buyers access mortgage finance. Expectations tor other credit products are broady in line with our Autumnlwintct Bamrnetw. - n. m..1 "mu t'n ; n~<uI; u_| r :1 Mu-rfli —t« . .r. a nllno-tr! . l l l ‘V’ zulup . tllDill“lIllI 2 ii , lli Vii L-Lill . :iUl| ill i- , i,li -
  • 32. .. .with Poland and Spain expecting the greatest growth in personal investment products. .. How do you expect customer demand for retail products at your bank to change over the next six months? ‘ Personal savings and deposit products 11.: IE : so IO. ) '7' :21.’ J, HA I: ‘ 3!? " In I i he H’ r 23.1 A - :1 to IL In if ’ . . 1.v i TIT ' 1' ’ ’ III I I ' II 4.4.’ 1!. " L1 21,! LU u ' all M Personal investment products 1 It an V, ‘ ' 3 7,! ca ' 11' ‘V in '5, as ‘ XI’. 1‘ ",1 Iil Ia ' ‘tn tn T! “ 11.‘ ‘IT 7 )0 7,1 ' ff 1'‘. cu in 2" ’ 11.: I l I: T II (I ur . .'in i a.1 E 0 III IV. ' 11.! I [I ii«r. .—. . i, .~ii, Ili"- t V "l. ---. i:, " ‘ nmuu mun PI pcuiqz at pup: -an-in aiu -mvosa 1. tUlUpI, '.7Jl1 tiaii-. ing jJ|4_ ii-, hr — apii Personal real estate loan: i THY I 111 f Wm‘! T 11.! hit? Il. I ‘JIT 51.: 37.2 cu ’ filf '1' ISA Z73" "Eff TY’ . '1' ~ la '11? mi *3K Personal loans ml? Tr -5.6 ' IE :2’ E! ‘ at ‘ ‘IT I‘! [J J. I I 25 *3.“ in Z" . e * TIT 7 ' ‘II. ’ ; K' ' 3E : .r. . . .. '. |'lil. alt’ . iii ; iun'iii'u‘ . ’iJl l 511 El 8! MI in Til 17,7 I3] 7" s. I i : l7.I an as (Y1 11 [XI RILLI II 22.7 I: e
  • 33. .. .but demand for non-mortgage lending remains subdued How do you expect customer demand for retail products at your bank to change over the next six months? ‘ Credit cards in ‘ET :1, in l 7.7 ' HZ ? ‘» 1.1 u’ 71: ‘V as | r I in '11.‘ "11 as ~_r, ‘l 4 * :1 Z 4 4 i ‘ ll. ) IL‘; 1‘ in , . I ‘ '7 II u n: ‘ _u > {IT KI i . . rim . i . l lmil‘ n‘—. i. .. . ii: -7--in . ,i ID. ’ i . ii, Comments: - Belgian banks cxnncl customers demand to increase by 57.7% on personal real cstatr: loans and prvsonai investment produds over the nnxt six months. ‘Mutt-a-. ufiul tut in-.4400}: Ll nauuvi. N-l- -i-u uumonll 33 turupmii Udllvllllrl fiilii, lli iii» — ; -i, iii ; Dullili t‘ Jijli 7:‘,
  • 34. Banks anticipate increased demand for most corporate banking products and services. .. How do you expect demand for corporate products at your bank to change over the next six months? ‘ rmhl iu-. i - l G t i 14 Li. Lu’.1lv, li_: V 5 A-' i 13,5 ’l'1 pir. .iii. ~i. 5 - 13 '-, is. »’« Chi’: l‘, _"‘. ‘ 2 '1 r I5 Emil"; Ml» 3 l-“ -' 10 i'ii’i~. 'iI- I, . l : ii'i'_l-, i I iii: '-—: —»- I iqiir E ‘: ‘r1‘, t‘-— = ,'i ii» Ll»-i’ -'-aw : .li~; ‘iv I lJ>-i"—'4 >4 : .ii1i'ii‘| i"1=’il . comments: . i4_i - Banks anticipate the greatest demand in corporate ianding and debt Issuance The ylwmt In corporate lending is unsurprising as European corporations remain heavily dependent on bank debt for their financing needs, but bond issuance is also becoming an increasingly attractive turm oi finance for lmgr corporations that are able to access ihr. oi-. l>t market: Bond financing has become chi-ziper as cr-mral bank adion has eased aeoit spreads‘ The outlook for equity issuance is more disappointing. Despite recent gains In equity markets. IPO valuations nzmin Ian and the nigh-profitalailure of a number at large IP09 last year has discouraged new Ilillflgir Equity issuance is also typncally more emensive than other terms of tinanoe. 'VIlvhu'I It mi lfd in-. -niqx :1 ie. u:-n. -i- -in IVIBGIIH 31 turupiisiii I: i‘iill<lll| VI fiiili, ii. iii» _ f. -Lltl , - DlJi1litr‘ Jrjli F_‘l
  • 35. .. .especially corporate loans and debt issuance. .. How do you expect demand for corporate products at your bank to change over the next six months? ‘ 0953 “WING Corporate loans In It - E , In * 1!: It I! ” v u ' i Tm“ * gr. nu In 4.9 U0‘ ' In 25 i an " 1); “ TV‘ I|1 II T! ‘ In , ' | "A IF I (7 FT TT M : "H *1’ ’ '11 In EC’ 25 2" 40 j, ;.; to frit at u 39 T71? ' ’ nu WY 4; it i i ,3. Q 1 I: I :51 T M. ) I in arm in E i} at r 3L‘ :1, 0.: I11‘ sf M Hedging products IIAA advlnotv I ' I17 11: It’ 20 iv ' 311 i" as l 1. to AI Elf III 11.! (I i r£r—: x.%' TV In 3‘ ax ' '31‘ " In: I"-rl 5: ' II! J, 21.! It J 21.1 nu in w 11.1 I n: J: an IE ’ 3* i r 4 2 A 2: i : i , ,., i A in. an 5‘: ' ix ' i '- u' if ' an ) '5 " T an in‘ in 1’ 5 1‘. H > I :1: I i il l . l< - . . H l iiilii 14- -'—. ii'. ii-iv ‘Al ‘Mm-. -. i. .s. ii ii. llI‘: O1lIl)I um. -.-o. m mi -m. -.i. -i it izurupix. -‘iii tian-. ini_1 : i.1ii_ ‘llv, r-4' — jpll ; vUiTliT L" Juli 5‘ '
  • 36. .. .but demand for equity issuance will continue to decline outside of France, Switzerland and the UK How do you expect demand for corporate products at your bank to change over the next six months? ‘ Equity issuanceIIPOs 1‘ 20 2.9 ‘If V In 1 9.! ‘V’ ’l 21.1 III Ix: ‘ ma : - tli II‘. III 7 VT “ it ’ II T II‘ In Yl tn 11‘ In 5 an iii, . i ll‘ mi. 1 A— , : i. l_ll, -t . . . i.ii‘i Comments: - While European banks anticipate incrnascd dun-and for most corporate banking products and services especially for corporate loans with 44% and debt issuance with 47.3%. Belgian banks expect Increase or 33% on Hedging products. - However. Belgian banks expat: significant decrease at 75% in Equity lssuanceIIPOs and 50% on debt issuance ' nmi-n mlerl i-= g-wuuiuu =1 mm-an-i. urn -uiwm turupiisiii tjiiiiiiri-,1 fiilli, ii. iii» _ ; -Lltl ; Duillil V‘ Jrjli in] i
  • 37. Employment
  • 38. Job cuts remains on the agenda of European banks and Belgian banks Over the next six months, how do you expect the headcount of your bank to change? ‘ Autumn 2012 spring 2013 n P 43 M’ ' ‘" “r‘r; i.w'| ._w l‘ . r‘ win» . ,i'ir F1‘ r' or u . In. 1“ mini M .4. Comments: - European banks axped job cm; to continue to play a significanirole in [hair restructuring and oosl mduchon agendas. with 41% anlicipalrnga hill in hradttounlsovur the mexl xv: months - Belgnan banks rollouv the same lnmd _wMn no unaemms Is emeecleed com prsrnd 11% six monihs. ago, 43% expect to reduce nrendcounIs over the next! SAX morrlhs ‘rm-r. .n ruku rz x-: —.m-xx :1 mun-n: -r. um -nu-: -m r ‘i r r r ‘V’ ~ : urup. nri: un‘<rIIvl: H,Hv"‘ ; -pH . :ur| mi- , >,ir -
  • 39. Ongoing restructuring programs will lead to further job out Over the next six months. how do you expect the headcount of your bank to change? ‘ Auttlnn 2012 Spring 2013 Au‘-We Mama u tr 12.5 A '""a; r;. JJ. "' """ " """"""""""" "l -"i&§. JnI ’ """"""""""""""""" "2 '""é. In§pZ “' ' ' ‘ ‘ ' ' " ' ' ' ' ‘ ' ' ' ' ' ' ' ' ‘ ‘ ' ' ' ' ‘ ‘ ' "éu'n5p'e"'" ' ' ' ' ' ' ' " ' ' ' ‘ ‘ ' ' ' ' ‘ ‘ ' ' ‘ ‘ ' ' France H M I France Germany I: 4:. » Germany r : 51 Italy New Nemeflands Netherlands M1 iv . Nordics en 4! Norms Poland e. 3) ‘ Poiand n 31 * spam Spam Swnzerrand 1=. .37 Swnzevlena 2 er 5.5 UK ,4 27 A UK 2:’ 25 I I I Increase signrfrcarmy I Increase slrgmly I Staylhe same I Decrease slightly IDecrease srgnifrcantvy ‘Mann-ruxI-pusunq-umpun-nnunn-I-noun 39 European Banking Barometer — Spr1rr9‘$ummer 20 I 3
  • 40. Back office functions will bear the brunt ofjob cuts, but banks are beginning to recruit in growth areas. .. Which areas of the business do you expect headcount increases/ decreases to take place? ‘ Auturnn2012 spring 2013 n“ man“, Net lrumiese! awn, " In decrease In “"0”. -N I-udcoum I E II .3 2' 37 14 I III I - IIIIII 5; 15 Z 33 .1 II I I I I 27 7 2 3| 1| I I I I I o 2:: 23 TH 'I- it I za 9 I I III I : 13 -17 in .5 I I I IIII I nu L: I2 1 Ir I ma 2 7 -25 II I s4 .4 I 5 .29 I I i r Comments: - Redundancies will be centered on me bsclt omce. where banks are actlvay slreamlimng and automating processes to cut costs However, the rate at job cuts In lront oflice lunctrons — ind uaing investment banking — has slowed More positively, some growth areas exnec1 to see new IODE created. including private banking and asset rnanagamantacross Europe. and corporate banking in the UK and Spain -u. I.I. .«. It4: (ir'e ; .II m. .n "A-1.o4i'. avu)¢n. .-I I>II. n. tn n I-. .t. .I. .-I . II. I;uI; - . ; 'l| I—r I. .,. ,.. sm-. yI, ..Iu -. ~I~I. ..u. ... ,.uu_.1I. -II. .. ulu»‘JV. ' Etl I. ... .I. ... 1.. .. Ijllltl s. ..II, :.. IIII. ..-zu Fnuulthqrh . .I-IIII. m.-1.4.. -I: I. ,.. I.. . . I An! zI. .., . II «_. ... ..II. ., . ..I r I I I I I ‘V’ I Eulup . illD<ll“lIl'I 2 II , III VII L-LIH . ZIUIIIH II , >, I I -
  • 41. Em-rt A Va. -9 Auurav: e| Val lrauamarrslklvtsuy lbs-it lrnn I Ve-up Err-It lIVa. :u ls Igloo] been In aunnce. ting iraunclnn -oeoaiery I-raises wa»lm-amour ‘£71213: pa; -hm Wlludby an arena vetus are n inmetrn cumrrmr-entto gale, we male I II"-Home Ir, linbtngoupmgla cu dirt: and air Ito: ourrrrrrurrnu etflwu the-r putenfl Errul 5 Volt; refine I: lie ylntzelcgrlntruvr d rvdlwlaer tlrrru 01 Ems‘. 5 Vouru GUaoIlLimnv. I1.eecr M which I II seoerete Inga avary. Emst I Young Glob: Li“IlDd a LK DU“9il| y Irrrneoby ¢_y. iIrs1e9.dI5oI mt prwiflo unites to charts. Kev rr-in man-attnri smut my nrunmni arr. pun val vmwn com G 2013 EVOII Lkrllhed NI Rights Reserved FVG rm. EK0151 Yhiipnlilcaton covrlnnl InrimuuoIIIn nmnuy rum me is hurelove Intended for generulfilttunce lady I I N! intents: :3 lie I u. bsIu. tI lw netaled rewuth er the urns: til pdnuonuiyugrrierir Nolher EVOM ln-rltd nor ry can nerbernlne dubs Lrrm A Von; orwnizaliun can accept any mspenublliyhr loss ecuninned In any nerum lung ornrfenng h-rm orliiriee 3 rest! 01 av; mslwtd nllus puilcalorx On any soocllc rater. relerruce should be rude In In Ipproeroele adv: -or Ebmrva [:1 - :