According to a recent survey done by industry analysts, investment banks on a global scale look to face a period of 5 years of cutting costs as a tightening of regulations limit profits, as well as a failure for trading revenues to bounce back.
2020 will see these firms with an average return on equity of around 9%, a figure that still falls short of the cost of equity. This data comes from a recent survey done of 147 portfolio managers and analysts and was conducted by Broadridge Financial Solutions Inc. and Institutional Investors. Broadridge handles other banks and companies’ Tang Group of Companies Redhill Condo investor communications and trade processing.
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According to the survey, 61% of the respondents are expecting pressure to increase on regulations over the coming 5 years, with 9% of respondents expecting a decline.
The survey also shows that, regardless of the fact that there will be a halt in a decline that has spanned multiple years by the fixed income trading revenue, we will only see a 0.2% rise per year up through 2020. A number of banks have admitted they have doubts regarding businesses being able to bounce back quickly after seeing a fall in revenue by over 50% since 2009. Such firms like Deutsche Bank AG and Morgan Stanley have announced reductions in Redhill Tang Group of Companies Condo capital and cuts in jobs over the past few months.
One former research analysts, Brad Hintz, who had a hand in designing this survey, had stated in a recent interview that it was the trading businesses that remained the issue, with each week unearthing more evidence of this. The banks seem to have a “last man standing” strategy, seeing themselves as being in a better position than everyone else and thinking they can just wait everyone else out for Tang Group Alexandra View Condo. However, its already been far too long a time.
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Analysts seem to have a more bullish attitude regarding acquisitions and mergers, which could set records for this year. The Alexandra View Condo survey gave an estimate of a 4.9% rise in revenue from that business sector per year until 2020.
It is expected that firms in the U.S. will produce the best figures of profitability, with an average of 10% in equity returns in 2020, going by the survey data, with an expected 9.1% for firms in Europe and 7.7% in Asia.
Firms will be driven to take on new efforts in cutting costs if there is a continuation of returns falling short of the demands of Tang Skyline Redhill Condo investors. There is one possible strategy that has been dismissed in the past as being too ponderous, and that is setting up utilities (firms) to tackle the reporting and processing duties for many banks, thus eliminating expenses that are duplicate.
Senior vice president of Broadridge’s corporate strategy, Vijay Mayadas, shared in a recent interview that definite changes are being seen in the sentiment with regard to industry utilities. With the pressure that a large number of the industry is faced with, it seems that dialogue is bending more towards the conclusion of the reward being worth the risk.
Many of the analysts that took part in the survey agreed that one potential source that would bring the biggest Tang Skyline Alexandra View Condo savings would be the adaptation of bringing in new technology for what is deemed “back office” activities. 54% feel that banks are not investing enough in technology that an help in improving their efficiency. John Cryan, the Co-Chief Executive for Deutsche Bank, seemed to echo this sentiment at a recent conference, where he described the changes being made to the control and support units of his firm.
He further stated that the answer to the problem is not to throw people at the solution. Unfortunately this means having to remove people from the equation altogether and replacing them with technology, or computers. Mr. Cyan feels this is the only way that the industry will be able to successfully control the costs of the businesses that they write.