Jobs cull as Europe's banks step up costs battle
By Steve Slater
LONDON (Reuters) - European banks have admitted they have a cost problem, and must now show skeptical investors they are doing all they can to lead a profitable life without the crutch of bloated jobs, bonuses and business lines.
Critics say many have been too slow to acknowledge the scale of the problem and need to step up the pace of change.
"Banks are throwing in the towel and saying now we need to resize for the new environment," said Andrew Lim, analyst at Espirito Santo in London.
"They didn't want to get caught out by seeing revenues rebounding, but they've now seen the debt crisis continuing quarter after quarter."
The scale of the challenge is daunting.
Investment banks may need to cut 30-40 percent of staff to correct industry overcapacity brought about by efficient new technology and clients demanding fast trading execution at the best price more than advice on deals, said Simon Maughan, analyst at Olivetree Securities.
Consultancy Roland Berger predicts a more modest cut of up to 15 percent over the next five years, but that would still see the axe fall on 75,000 staff from a global 500,000 workforce. Continued...