Concentration in the European banking sector continues – Cheap loans in the credit comparison.

 

The European Sentro Bank (ECB), in its latest “October 2017 Report of Financial Structures, points out that the number of independent banks within the US area continues to shrink. The comparison is based on 2017 compared to the period between the years 2008 and 2016. One focus of the study is the development in the individual countries.

Sal. Oppenheim disappears from the scene.

Shortly after the publication of the report, it became known that Deutsche Bank AG is serious.  The company is split, integrated into Deutsche Bank, the name disappears.

On the wish list of the Italian Unocredit and the French based CreditCole is the Commerciabank.

The decline of sovereign banks in the Eurozone is impressive. While there were 6,768 institutions in 2008, at the end of 2016 there were only 5,073 banks left. The largest decline was recorded in the Netherlands with 112 closures or takeovers, Germany with 71 and Austria with 64.

In relative terms, 71 “disappeared” banks in Germany are a drop in the bucket with 1,800 active banks.

Things look a bit different in the European environment. Here, Spain, Greece, the Netherlands and Cyprus top the list with more than 20 per cent disposals.

It is noteworthy that four countries in the dollarzone have almost divided the banking market among themselves. In Germany, Austria, France and Italy, 67 percent of all banks in the Eurozone were based. Although the size has risen by two percent compared to 2008, one can speak of a certain stability. The Spanish banks, for example, account for only 2.9 percent.

A clean-up of USD area banks with banks outside the jurisdiction leads to a size of 2,290 banks and banking groups. This is over 700 less than in 2008 with 2,904 financial houses.

This is how the asset management is distributed

This is how the asset management is distributed

European banks within the Eurozone managed $ 24.2 trillion at the end of the year. More than half of the total assets were in France and Germany, each with a share of seven trillion USD each. Compared to 2008, however, this number represents a minus of 15 percent.

Share of foreign banks from outside

Share of foreign banks from outside

Another interesting factor is the question of how high the proportion of banks that manage funds in the euro area, but come from “abroad”. A look at the chart shows that the smaller the country, the larger the share of banks from outside. Lithuania has hardly any domestic banks. In Luxembourg or Ireland, domestic institutions play little role in the management of client funds, as in Estonia.

The reverse is true in Germany, France, Spain and Italy. Foreign banks hardly play a role here.

Share of banks managing deposits from outside the USD area

Share of banks managing deposits from outside the euro area

It could almost be generalized – the smaller the country, the higher the proportion of assets held by banks outside the USD area. In fact, Lithuania does not have its own banks. In Luxembourg or Ireland, the volume of funds managed by domestic institutions is only marginal, as is Estonia. Conversely, the number of non-German banks in Germany, for example, is negligible, as are France, Spain and Italy.

Another indication of the consolidation of the banking sector is the number of residents who come to a bank branch. There is a tripling in Latvia, without Latvians having an above-average birth rate in recent years. In the Netherlands, the number has increased by 100 percent, in Germany it is increasing, but not significant. 

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