European banks set to cut 20,000 jobs as profits decline
ING will slash 5,800 positions over five years as it focuses on internet and mobile banking and automates systems, the Amsterdam-based lender said.
Last week, Germany’s Commerzbank disclosed plans to cut 9,600 jobs, while Spain’s Banco Popular said it will eliminate as many as 3,000 posts after tapping investors for funds.
“Banks are facing high regulatory costs and competition on margins and pricing due to the low-rate environment,” said Karim Bertoni, a fund manager at Bellevue Asset Management in Switzerland.
“They are trying to reduce costs and people are one of the biggest parts of that.”
The announcements herald the latest wave of job cuts at European banks, which have struggled to increase profitability since the global financial crisis and the region’s sovereign-debt debacle.
With negative interest rates, volatile markets and tougher capital requirements eroding earnings, some of Europe’s largest lenders have been forced to deepen cost cuts.
Financial firms have seen their value shrink by €249bn in 2016.
They represent about 11% of the Stoxx Europe 600 Index, near the lowest on record and down from a 23% weighing a decade ago.
“You need banks to lend,” David Kelly, chief global strategy at JPMorgan Asset Management, said.
“They’re being hammered by first of all these fines and by all the regulation and by the European Central Bank keeping rates so low.”
Deutsche Bank is poised to reach an agreement with labour representatives this week that will allow it to eliminate about 1,000 jobs in its home market as part of cost cuts it announced last year, said sources.
