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Danish banks continue to struggle for their survival but the lack of evolutionary business models put more pressure

Monday, 23 September 2013
Analysis of the Danish banking scene shows that the way the banks have driven their businesses in the past is now pushing them deeper into severe pressure, something that started when the financial crisis hit in 2008. Since then, several Danish banks have collapsed and recent review suggest that more are still to go.

The overall observation of the Danish banking business models show that a next collapsed in around the corner. Although 53 banks have succumbed to this pressure since the financial crisis hit the country, and the reasons for that have to do among others, with their business model according to the key players of the sector. They also posit that a hard-line elimination will take the lives of those who fail to develop sustainable business models, writes Danish daily, Jyllands-Posten.Danish Banks

"We have in recent years experienced a liquidity crisis, capital crisis and a revenue crisis in the banking sector," says John Fisker, CEO of RL General Bank, to the newspaper.

"With the exception of about 10 banks, the sector is coming out on the other side. Now we are in a business model crisis. The way we used to drive our businesses has collapsed," he adds.

One driver of the problem is that where private customers and companies are holding back and cutting their balance sheets. This leads to declining demand in banking products and this has spilt over to cost cutting and closing branches.

"We are not finished with structural adjustment yet. I think that the number of branches will be halved over the next five years," said John Fisker.
Jyske Bank expects that due to the problems faced by a business model that is not durable, along with a growing regulatory pressure - that will sock more life out of nearly half of the country's remaining 88 banks in the coming years.
The bank expects that there something like 50 banks will be left around in the country by 2020 and that the survivors will be those best able to adapt to a shrinking or stagnant market. In this way, business models are crucial.
By Scancomark.com Team


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