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Investment Analysis of the European Banking Industry

  • ID: 3330375
  • Report
  • Region: Global, Europe
  • 66 Pages
  • Frost & Sullivan
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Industry Performance Will Remain Muted in 2016
This research service aims to provide a holistic picture of the European banking industry. It analyses financial data, identifies top performers, and discusses the relevant mega trends. It offers an overview of the financial state of the industry. It also includes a transaction analysis, which includes mergers, private placements, and public offerings. The revenue forecast period is from FY2015 to FY2020. Industry outlook is provided for the next 18 months ending December 2016.

Key Objectives

The following are the key objectives of this study:

- To analyse companies in the European banking industry based on key financial metrics and financial ratios

- To identify key performance drivers and restraints that affect the industry and develop an outlook for 2016

- To identify the best performers in the industry based on financial performance during 2009-2014

- To identify and assess trends in transaction activity such as private placement, public offerings, and mergers

- To discuss the best practices of top performers and provide a competitor analysis based on financial parameters

Scope of the Study

Study Period (Time Frame)

- The study is based on financial year (FY) 2009 and FY2014 for all companies analysed. The base year is 2014.
- The revenue forecast period is from FY 2015 to FY 2020. Industry outlook is provided for the next months ending December 2016.
- Europe Regions Covered Companies Covered

Ratios Covered

- A total of XX public companies in Europe were taken as a part of the analysis in this study. These were diversified banks, community banks, investment banks, and thrift banks. They were chosen based on consistent availability of data throughout the study period.
- Sets of ratios: profitability management, cost management, capital management, solvency management, and liquidity management.
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1. Executive Summary

2. Introduction

Key Objectives
Scope of the Study
Abbreviations and Acronyms Used
Research Methodology

3. Market Summary

Market Overview
Market Structure - Porter's Five Forces Analysis
Market Drivers
Market Restraints
Mega Trend Impact
Market Revenue Statistics
Revenue Forecast Discussion
Market Share Statistics

4. Financial Assessment of the European Banking Industry

Financial Management Snapshot
Financial Management Trends - Revenue
Factors Affecting Revenue Growth
Financial Management Trend - Profitability
Financial Management Trend
Methodology for Identifying Top Performers
Top Performers - Financial Management vs. Risk Management
Top Performers - Financial Management vs. Risk Management Discussion
Top 10 Performers by Category

5. Transaction Analysis of the European Banking Industry

Transaction Overview
Merger and Acquisition Trends
Private Placement Trends
Public Offering Trends

6. Conclusions

7. Glossary

Legal Disclaimer
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As the global banking industry moves towards a digital era and grapples with the nuances of changing business models, the European banking industry is still struggling to find its foothold after the 2008 financial crisis.

Market Analysis

The industry is highly concentrated, with the top banks holding nearly XX% assets and revenue market share in the region. Market revenue is expected to stagnate due to economic, geopolitical, and regulatory concerns limiting industry growth. Customer focus, digital convergence, increasing competition, stagnant revenue growth, process integration, product innovation, defining new target segments, and changing business models are the main challenges for the industry. The European banking industry must strike a balance between risk and profitability and become more stable and sustainable.

Financial Analysis

The industry is coping with financial issues such as stagnant top and bottom lines, declining return on equity (ROE), increasing non-performing ratios, low capital ratios, and high leverage. There is a shortage of funds to raise capital and strengthen the industry balance sheet, but the super-complex operating models of large banks, IT infrastructure, and adapting to new techniques such as Big Data management all require huge investments. Rising regulatory compliance costs pose another strong challenge.

For instance, the Basel III, Dodd Frank Act, and other regulations have affected the capital base, ROE, and other operating metrics of the banking industry, as companies incur additional costs to comply with these regulations. Cost-cutting measures such as downsizing human resources and capping salaries are being negated by increasing costs in other areas.

Transaction Analysis

Mergers, acquisitions, and spin-off transactions may occur during 2015 - 2020 due to the strategic initiatives taken by banks to discard their non-core businesses while focusing and developing their core strengths. Follow-on public offerings (FPOs) may be a preferred way for diversified banks to raise capital, while others may try to source funds from private equity (PE and PIPE) firms.
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