Western Banks axed 59,000 jobs last year, more cuts to come in Europe

From Reuters –

“European and U.S. banks axed 59,000 jobs last year as they restructured and cut costs, with headcount expected to shrink further in Europe as bosses strive to improve profitability that has been hit hard by tougher regulation.

Lenders have also sold or shut businesses to narrow their focus to avoid falling foul of regulators concerned that some have become too big and complex.

Analysts said that European banks, especially those in the euro zone, are likely to wield the knife again because they remain the most unprofitable in the world.

"The screws will stay tight on headcount," said Aymen Saleh, managing director at Boston Consulting Group in London.

"A handful of banks globally have really looked at structural change and taken a big cut from their cost base. The majority have done some tactical and convenient belt-tightening to take out costs, but without really fundamentally changing how they operate or their business model."

Eighteen of Europe's biggest banks cut a combined 21,500 jobs last year, but that was less than half of the 56,100 jobs cut by the same banks in 2013, according to data compiled by Reuters.”

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FATCA costs spiral beyond expectations

From Treasury Insider

“Only a third of financial institutions now believe that their FATCA compliance efforts will now be completed within budget, according to a new survey by Thomson Reuters.

Undermining the costs involved appears to be a common problem, with 27% of organisations surveyed saying that they expect their FATCA compliance spend in 2015 to be between $100,000 and $1m, compared to just 16% of those asked the same question at the beginning of the year. Over half (55%) expect the costs of meeting the new rules to exceed their original budget.

Last month, the UK and 50 other countries from the Organisation for Economic Co-operation and Development (OECD) signed up as early adapters of the Common Reporting Standard (CRS), an international agreement to create a new standard for the automatic exchange of information.

“The whole problem of FATCA has just become bigger,” commented Laurence Kiddle, managing director of corporate market EMEA for the tax and accounting business of Thomson Reuters.

“CRS is a game-changer. It dramatically widens the reporting scope and this puts massive strain on budgets. A financial institution needs to be able to identify the tax residence of each of their customers – not just whether or not they meet the definition of ‘American Person’ – and have the ability to report this to the relevant authorities. This increase in the scope, depth and complexity of reporting is a very significant challenge.”

Financial organisations will be required to submit FATCA reporting from the end of March 2015.”

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The Revenue Is Not Coming Back: It's Time to Manage Costs Differently

From PwC - Banking and Capital Markets

The revenue's not coming back: PwC partners John Garvey, Bob Lieberberg & Bob Ross discuss the results of a new study, and why financial firms must focus on expense management to achieve the results they desire.