75216
Banking Staff to Be Halved in 10 Years
Banking Staff to Be Halved in 10 Years

Banking Staff to Be Halved in 10 Years

Banking Staff to Be Halved in 10 Years

The 6,000 job cuts announced last week at Nordea Bank AB are just a down payment for an industry facing radical overhaul, says Chief Executive Officer Casper von Koskull.
“If somebody says, where are we, or where are banks, 10 years from now, banks could easily have half what they have today,” in terms of personnel, von Koskull said in an interview in London, Bloomberg reported.
Nordea last week stunned unions, analysts and investors when it revealed the staff reductions, which amount to well over a tenth of the work force of the Swedish bank. Unions called the step “shocking” and “brutal”.
The industry is already a lot leaner than it was before the financial crisis. The European Banking Federation estimates there are about 14% fewer people in finance in the region than before 2008. There are now about 2.8 million people in Europe working at banks. Nordea had about 31,500 employees in the third quarter.
Von Koskull says what Nordea is doing represents the future of banking. While speaking to analysts in London last week, he described a universe in which only the leanest, most digitally advanced and efficient banks will thrive. Firms living in the banking dark ages are already failing, he said.
“The fact that some banks—not this bank—have been technically insolvent every 15 years, that really does not mean that they are resilient,” he said. “Resilience is something that this industry, and any bank, needs. And that is something that we have been building. And resilience is not only about capital, resilience is your operations, your systems, and everything you do.”
While the upfront expense of such a transformation isn’t small, von Koskull says the bank will soon be using a lot less of its income to cover costs. The ratio of Nordea’s costs to its income was 51 in the third quarter. Von Koskull says that number will be in the “lower 40s” when the bank has transformed itself.
The Nordea CEO told Bloomberg that he views his bank as a pioneer in how it’s looking at the fundamental shifts now gripping the industry. “We are maybe one of the first ones,” he said. “This is not a cost cut, per se, it is a way of doing business differently, where you need less people.”
He said complaints from unions are hard to understand. “They know” what’s coming, he said. “We’ve been talking about it for two years.”

Short URL : https://goo.gl/FLNn3s
  1. https://goo.gl/gzA56V
  • https://goo.gl/e9WGB9
  • https://goo.gl/Q2URqi
  • https://goo.gl/yB7Ytq
  • https://goo.gl/awfqVE

You can also read ...

The treasury department in Washington
Foreign governments pulled back their purchases of longer-term...
Brazil, India Corporate Debt at Risk of Default
A 200 basis-point increase in interest rates could spark a...
Shares of petrochemical companies in Asia slumped on Tuesday, tracking the global equity downturn overnight.
The trade dispute between the world’s two largest economies...
Six people including two former HBOS bankers were jailed last year.
An internal Lloyds Banking Group report written by a former...
BoK Hints at Rate Increase
Bank of Korea Gov. Lee Ju-yeol indicated Tuesday that the bank...
China Accuses Trump of Blackmail, Vows Strong Retaliation
China vowed to retaliate after President Donald Trump...
London Metals Cut Losses
London metals edged higher and Shanghai contracts cut early...
Mario Draghi
Mario Draghi promised that the European Central Bank will take...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus