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A new study of the 50 largest banking groups in the UK and Europe calls for disruptive management strategies to reverse lacklustre profitability across the industry, warning that Return on Equity (RoE) and Common Equity Tier 1 (CET1) ratios are in danger of falling below the average market and regulatory minimum over the next five years.

The European Banking Study (EBS), recently launched by zeb, shows that European banks are lagging behind their international counterparts in profitability and operational efficiency. It goes on to predict four major trends that will dominate the European banking scene from now until 2021 in response to the current unhealthy state of the industry.

“Profitability has become the critical concern for the European banking industry,” said Bertrand Lavayssière, Managing Director UK, zeb. “Actual organic profitability of Europe’s top 50 banks has declined significantly since 2012, and their average RoE has fallen to a level that is about half of what shareholders should expect based on a standard cost of equity calculation.

“And with Brexit looming ever-closer, it’s set to be an even bumpier road ahead. Although the top 50 European banks have strengthened their capital positions with a CET1 ratio of 13.5% in 2016, upcoming regulation and a continuation of the relatively low yield environment will increase the burden on these banks. If banks do not employ disruptive strategies to reverse their own fortunes, they risk becoming targets for acquisition. Without taking decisive action quickly, banks’ profitability and financial strength could deteriorate further by the end of the decade - we could see, in a baseline scenario, RoE fall to 1.5% and CET1 ratios below the average market and regulatory minimum.”

The zeb European Banking Study includes:

You can find a copy of the report here.

(Source: zeb)

With over 60% of global travellers identifying the smartphone as their "most indispensable" travel item, a new airline industry brief from CellPoint Mobile explains why carriers should embrace the ‘Three Ps’ - Passengers, Payments and Profitability - as key components of their strategy for revenue growth in 2017.

The airline industry is currently at a crossroads defined by high expectations for financial success, rising competition, and a mobile marketplace that is undergoing profound, rapid and global change.

Already accustomed to using smartphones to pay for everything from shared rides to in-app retail purchases, today's passengers also are demanding access to the most popular digital wallet solutions and alternative payment methods (APMs) to meet their travel needs. Airlines that enable fast and convenient ways to pay through Android Pay, Apple Pay, PayPal, MasterPass, Visa Checkout and Alipay and other solutions are well positioned to capture lucrative revenues from the mobile marketplace.

By acknowledging the impact and potential of the Three Ps, airlines will be better positioned to create more paths to purchase for passengers and to reach their revenue goals for continued growth and increased profitability beyond 2017.

The industry brief from CellPoint Mobile highlights key trends and growth from across the airline and travel sectors, including:

Airlines that make mobile transactions easy and seamless for their passengers can capture new revenues that arise from a variety of opportunities, including the direct sale of tickets and services, ancillary products, day-of-travel purchases and upgrades, impulse purchases, loyalty program transactions, social media channels, chat bots and other emerging technologies.

(Source: CellPoint Mobile)

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