Structural change needed in Euro banks
Banks and insurers in continental Europe could enjoy significantly improved growth and revenue and unlock increased franchise value by adopting new growth strategies, according to global management consultants Casey, Quirk & Associates.
The institutions could unlock an additional 175 billion euros in franchise value from the asset managers by 2015, increase revenues by 24 per cent and add 2 trillion euros in new client money according to Casey Quirk’s white paper, Untapped Opportunity: Realizing Value in Continental Europe’s Asset Managers.
The new growth strategies include offering equity linked to long-term asset management performance, which would help banks and insurers more effectively battle for talent, according to the paper.
Other strategies included investing in distribution channels that are not affiliated with the parent banks and insurers, rationalising the suite of investment products offered, and determining whether to fully globalise or retrench to concentrate on select European markets, the paper found.
“These changes will spur growth in continental Europe’s asset managers and make them as competitive as their foreign counterparts, both at home and abroad,” said Casey Quirk partner and report co-author Kevin Quirk.
The changes would also create significant value for the parent banks and insurers, which is critical in the crowded European marketplace, Quirk said.
Optimising growth through the strategies outlined in the paper would boost the valuation of continental Europe’s asset management operations to that of listed money managers, through a combination of stronger asset gathering, higher fee realisation and greater efficiencies, according to the paper.
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