HEADWINDS FOR EUROPEAN BANKS

IFR's Keith Mullin has penned an interesting and timely article regarding the headwinds facing European banks in his February 13th 2016 journal edition. He questions how much longer will boards, execs, staff, shareholders, and financial players maintain confidence in the direction of European banking. He points out that India's HDFC Bank, the second largest private bank in the country, had overtaken each of DB, CS and SG in terms of market capitalisation. The author openly questions the strategies of a number of European banks and wonders if a break-up makes more sense at some point. Related to this is the few but growing calls to radically improve returns or carve out attractive assets, such as the US investment bank at Barclays or set up a IHC (a la American model) with an independent management team and board. Ah... the game of banking twister continues notwithstanding the quality of the management teams who signed up for the challenge.