Britain's bank bosses have warned that cost cutting measures will have to be ramped up as stunted revenues and low interest rates continue to take their toll on the sector.
A survey of UK bank chiefs by PwC found that almost 70 per cent said they expect to implement a cost cutting scheme in the next 12 months, while nearly a third said they would expect a headcount reduction in the next year.
Bank shares have been battered in recent weeks by the ongoing threat of fines, the increasing likelihood of long term low interest rates and the risk of debt defaults from commodities firms. This month has seen Deutsche Bank, Credit Suisse and Societe Generale all warn on future prospects.
British banks will report full year numbers over the next two weeks.
“The revenue outlook has undeniably deteriorated in recent months, mostly down to weak loan growth and increased margin pressure through low interest rates,” Investec banking analyst Ian Gordon told City A.M.
The rising risk of cyber attacks and concerns over a changing tax regime is also adding to concerns. “UK banking leaders are not only taking the threats stemming from economic pressures, regulation and reputational risk management seriously, but that newer risks, for example cyber, are very much on their radar,” Simon Hunt, banking and capital markets leader at PwC said.