Private customer banks in Austria earned more last year thanks to higher interest rates and increased efficiency through savings programs and digitization. The profit increase is a good quarter (almost 28 percent).
According to an analysis by PwC strategy advisor Strategy&, domestic institutions made an average profit of 292 euros per customer, compared to 229 euros last year. On average, banks across Europe achieved an 18 percent higher operating profit in 2022 and turnover increased by eight percent. The volume of loans and deposits from private customer banks grew by an average of four percent. Strategy& advises the banks to use this favorable starting position now for further changes.
Drive change now
“Institutions should use the current rate recovery window for the necessary transformation in sales and product portfolio,” says Hendrik Bremer, partner at Strategy&Austria. Customers would expect a “smooth user experience across all channels”, so banks should communicate more actively with their customers and make products “more understandable, simpler and more accessible”.
Because the cost pressure remains high. Inflation effects are already reflected in banks’ own costs and are also being felt in deposits and declining mortgage production. And competition is also increasing, especially from fintechs and large technology companies. Banks must prepare for this. “To prepare for this, it may currently be worthwhile for banks to look beyond their own noses into FinTech collaboration and strategic M&A options,” said Andreas Pratz, Partner at Strategy& Germany.
Banks are closing down branches
However, some institutes have noticeably reduced their locations. According to Strategy&, European banks have downsized their branches by an average of 15 percent since 2021. The savings in the Netherlands were the greatest at 40 percent. Austria is below average at just under 10 percent.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
