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,
"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
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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