(Reuters) – Deutsche Bank’s plan to jettison much of its German retail bank and withdraw from one in ten countries sees it join a growing list of banks choosing to shrink and simplify to survive.
The benefits of size and reach, for years considered the holy grail of global banking, are now viewed as being outweighed by the cost and complexity of running businesses across dozens of countries.
Many bank bosses have given up on trying to offer everything to everyone. But as unwinding years of expansion proves difficult, pressure for action has intensified, from politicians who show little patience with institutions they consider too big and complex and investors wanting more return on equity (RoE).
“The underlying economics for banks … means being all things to all people is too big a burden to sustain,” said Bill Michael, head of financial services in Europe at consultancy KPMG. He cited low RoEs, high operational risk and hefty potential costs from regulation.
Originally published on Reuters.com Click here for the full story at reuters.com