LONDON (Reuters) - Top European and U.S. banks axed
59,000 jobs last year as they restructured and cut costs, with headcount
expected to shrink further in Europe as bosses strive to improve profitability
that has been hit hard by tougher regulation.
Lenders have also sold or shut businesses to narrow their
focus to avoid falling foul of regulators concerned that some have become too
big and complex.
Analysts said that European banks, especially those in
the euro zone, are likely to wield the knife again because they remain the most
unprofitable in the world.
"The screws will stay tight on headcount," said
Aymen Saleh, managing director at Boston Consulting Group in London.
"A handful of banks globally have really looked at
structural change and taken a big cut from their cost base. The majority have
done some tactical and convenient belt-tightening to take out costs, but
without really fundamentally changing how they operate or their business
model."
Eighteen of Europe's biggest banks cut a combined 21,500
jobs last year, but that was less than half of the 56,100 jobs cut by the same
banks in 2013, according to data compiled by Reuters.
Six of the biggest U.S. banks cut a total of 37,500 jobs
last year, having shed 45,700 in 2013.
That means more than 160,000 jobs have been cut across
the 24 banks in the past two years. The six U.S. banks shed 7.3 percent of
staff in the period, against 4.1 percent for the Europeans, the data shows.
Boston Consulting's Saleh said that the majority of banks
that have not restructured much could have to cut more jobs, though those that
moved early could be in a position to add staff in selected areas.
An IMF study last year of 300 large banks showed that
only about 30 percent of euro zone lenders had a structure that was able to
make a reasonable rate of return over time, compared with 80 percent of U.S.
banks.
SECOND WAVE
Tens of thousands of staff were axed during and after the
2007/09 financial crisis, but a fresh wave of cuts swept through the banking
industry in 2013 as trading income slumped and economic growth slowed.
"In a world where growth is harder to come by, I'm
more convinced than ever that costs will remain the strategic battleground for
our sector over the coming years," Barclays Chief Executive Antony Jenkins
said last week.
Barclays shed 7,300 jobs last year as part of Jenkins'
three-year plan to cut 19,000 staff, or one in seven employees, and save more
than 2.4 billion pounds ($3.6 billion) a year.
The biggest cuts last year were made by banks in the
United States, Britain, Italy and Spain. Royal Bank of Scotland shed 10,000
staff and more could follow as it sells overseas businesses and shrinks its
investment bank further.
Some banks added staff last year after sharp cuts in
2013, including HSBC, Standard Chartered and BNP Paribas, the data showed.
U.S. banks with large consumer operations, such as
JPMorgan and Bank of America, made substantial job cuts in the past two years
as they worked through troubled mortgages left by the financial crisis and
refinanced many loans at lower interest rates. Citigroup also eliminated jobs
as it consolidated back offices and quit some international markets.
Banks are also closing branches and laying off staff as a
growing number of customers shift to mobile and online banking.
The shift to digital banking and more efficient
processing is expected to exert renewed pressure on staffing in the coming
years.
Analysts at Citi last month estimated that 54 percent of
financial services jobs were at "high risk" from the impact of
digitization.
($1 = 0.6709 pounds) : 1 pound = $1.47,
(Additional reporting by David Henry in New York and
Jesus Aguado in Madrid; Editing by David Goodman)
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Source:http://www.businessinsider.com/r-western-banks-axed-59000-jobs-last-year-more-cuts-to-come-in-europe--2015-3#ixzz3VxgAKHQb
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