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Investment Analysis of the European Banking Industry

Investment Analysis of the European Banking Industry

As the global banking industry moves towards a digital era and grapples with the nuances of changing business models, the European banking industry is still struggling to find its foothold after the 2008 financial crisis.

Market Analysis

The industry is highly concentrated, with the top 􂀀 banks holding nearly 􂀀% assets and revenue market share in the region. Market revenue is expected to stagnate due to economic, geopolitical, and regulatory concerns limiting industry growth. Customer focus, digital convergence, increasing competition, stagnant revenue growth, process integration, product innovation, defining new target segments, and changing business models are the main challenges for the industry. The European banking industry must strike a balance between risk and profitability and become more stable and sustainable.

Financial Analysis

The industry is coping with financial issues such as stagnant top and bottom lines, declining return on equity (ROE), increasing non-performing ratios, low capital ratios, and high leverage. There is a shortage of funds to raise capital and strengthen the industry balance sheet, but the super-complex operating models of large banks, IT infrastructure, and adapting to new techniques such as Big Data management all require huge investments. Rising regulatory compliance costs pose another strong challenge. For instance, the Basel III, Dodd Frank Act, and other regulations have affected the capital base, ROE, and other operating metrics of the banking industry, as companies incur additional costs to comply with these regulations. Cost-cutting measures such as downsizing human resources and capping salaries are being negated by increasing costs in other areas.

Transaction Analysis

Mergers, acquisitions, and spin-off transactions may occur during 2015–2020 due to the strategic initiatives taken by banks to discard their non-core businesses while focusing and developing their core strengths. Follow-on public offerings (FPOs) may be a preferred way for diversified banks to raise capital, while others may try to source funds from private equity (PE and PIPE) firms.

About this report

This research service aims to provide a holistic picture of the European banking industry. It analyses financial data, identifies top performers, and discusses the relevant mega trends. It offers an overview of the financial state of the industry. It also includes a transaction analysis, which includes mergers, private placements, and public offerings. The revenue forecast period is from FY2015 to FY2020. Industry outlook is provided for the next 18 months ending December 2016.


  • Executive Summary
  • Introduction
    • Key Objectives
    • Scope of the Study
    • Abbreviations and Acronyms Used
    • Research Methodology
  • Market Summary
    • Market Overview
    • Market Structure-Porter's Five Forces Analysis
    • Market Drivers
    • Market Restraints
    • Mega Trend Impact
    • Market Revenue Statistics
      • Table Banking Industry: Revenue Statistics, Europe, 2009-2020
    • Revenue Forecast Discussion
    • Market Share Statistics
  • Financial Assessment of the European Banking Industry
    • Financial Management Snapshot
    • Financial Management Trends-Revenue
    • Factors Affecting Revenue Growth
      • Table Banking Industry: Loan-to-Deposit Ratio, Europe, 2009-2014
      • Table Margin Banking Industry: Net Interest Margin, Europe, 2009-2014
    • Financial Management Trend-Profitability
      • Table Banking Industry: Profitability Statistics, Europe, 2009-2014
    • Financial Management Trend
      • Table Banking Industry: Debt to Capital, Europe, 2009-2014
      • Table Banking Industry: Debt to Equity, Europe, 2009-2014
    • Methodology for Identifying Top Performers
    • Top Performers-Financial Management vs. Risk Management
    • Top Performers-Financial Management vs. Risk Management Discussion
    • Top 10 Performers by Category
  • Transaction Analysis of the European Banking Industry
    • Transaction Overview
    • Merger and Acquisition Trends
    • Private Placement Trends
      • Table Banking Industry: Private Placement Metrics by Deal Type, Europe, 2009-2014
    • Public Offering Trends
      • Table Banking Industry: Public Offering Metrics by Deal Type, Europe, 2009-2014
      • Table Banking Industry: IPO and FPO Deal Volume by Bank Category, Europe, 2009-2014
      • Table Banking Industry: IPO and FPO Deal Volume by Bank Revenue Range, Europe, 2009-2014
      • Table Banking Industry: IPO and FPO Deal Value by Bank Category, Europe, 2009-2014
      • Table Banking Industry: IPO and FPO Deal Value by Bank Revenue Range, Europe, 2009-2014
      • Table Banking Industry: IPO and FPO Deal Volume by Country, Europe, 2009-2014
      • Table Banking Industry: IPO and FPO Deal Value by Country, Europe, 2009-2014
  • Conclusions
  • Glossary

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