Banks need a radical overhaul to boost profitability against the backdrop of tougher new rules and a grim economy – and they expect their customers to share some of the pain.
That is the view of bankers, investors and regulators meeting in Copenhagen this week to assess how banks need to adapt to meet new regulations that require them to hold more capital and to cope with the deepening euro zone debt crisis.
“Let’s not waste a good crisis. Banks really need to focus on being quite radical in what they do,” David Hodgkinson, chairman of Allied Irish Banks and a former senior banker at HSBC, said on Friday.
“It is easier to do things when times are tough than when you are in good times.”
Bank bosses have been rethinking their business models since the global financial crisis erupted almost five years ago. However, many are now stepping up efforts as their return on equity (RoE), a key financial yardstick, is below their cost of capital.
- Bankers Push For Radical Overhaul (huffingtonpost.com)
- 9 of 10 Banks Are Mulling an Overhaul of Their Operating Models, KPMG Survey Finds – American Banker Article (jpnicols.com)
- Banks told to go for radical rethink (firstpost.com)