Europe’s last global banks are caving in to pressure from regulators and preparing to tell investors just how much their aspirations will shrink.
“The European banks were too long holding on to the past and not realising that this change is for good — it’s permanent,” said Oswald Gruebel, a former chief executive officer of both UBS Group and Credit Suisse Group.
“The main reason for reducing global investment banking is that, with the capital requirements which the regulators put on these banks, you cannot make any decent return.’’
Deutsche Bank announced sweeping management changes on Sunday, less than two weeks before co-CEO John Cryan will present his plans to scale back their trading empire.
Tidjane Thiam is expected to reveal a strategy to prune Credit Suisse’s investment bank in favour of wealth management.
Barclays, BNP Paribas, and Standard Chartered are also trimming operations.
Europe’s global lenders are struggling to adapt to rising capital requirements, record-low interest rates and shrinking opportunities for growth.
Their retrenchment risks further squeezing of lending to economies in the region and handing more business to US competitors, which were quicker to raise capital levels and are benefiting from growth at home.
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