German Bank to Spare Retail Jobs for Growth, Survey FindsNicholas Comfort
German banks will cut jobs in administrative roles and largely spare their consumer-banking operations as they anticipate growth in that business over the next six months, an Ernst & Young LLP survey found.
Support positions will be among the hardest hit, said 71 percent of respondents in Germany and 58 percent in the rest of Europe, the study found. Only 14 percent of German executives said retail banking will bear the brunt of cuts, while 39 percent of their European colleagues noted that business as an area job reductions will center upon, Ernst & Young said.
Banks saw demand for their services drop off as clients from private investors to institutional money managers shied from transactions amid the sovereign-debt crisis. Most German lenders expect their prospects in consumer banking to improve while 30 percent or more of respondents anticipate trading, dealmaking and the sale of securities for companies will suffer, according to the New York-based consultant’s study.
Banks will set aside more funds for risky loans, according to 46 percent of German bank executives and 45 percent of their European peers.
German bankers are more pessimistic about their country’s economic prospects, with 48 percent saying it will weaken and an average 41 percent of executives in other countries holding that their economies will worsen.
Ernst & Young surveyed 269 European firms in the last two months of 2012, including 50 German lenders representing more than 40 percent of the country’s banking assets.