McKinsey & Co have a big new banking report out. It says banks are in a bad way, that they need to cut products, push electronic platforms, merge, cut headcount, cut pay etc.
These are the charts that give the report its backbone. Redundancies are clearly not over yet.
1. On average, banks have cut 1,000 front office staff each since 2010, but sticky costs elsewhere mean costs have risen as a percentage of income
2. When costs are deducted, front office ‘producers’ aren’t really all that profitable
3. The industry is back where it was eight years ago
4. Europe and North America are still where it’s at
5. Redundancies aren’t over yet
6. Pay for bankers is falling, while spending on operations and technology is increasing
7. Margins are highest in DCM and compensation sucks profits in M&A
8. By 2017, Asia will account for a greater share of banking revenues than North America