Europe Regional Retail Banking Analysis by Country, Consumer Credit, Retail Deposits and Residential Mortgages, 2023

This report analyzes the European retail banking sector from a comparative perspective, highlighting key similarities and differences across markets within the region. The largest banks in each market-among other useful banking-related statistics, such as average net interest margin-are provided alongside macroeconomic forecasts, giving a feel for the composition of a given country's economy and retail banking sector.

The low interest rate environment in Europe has kept net interest margins low. However, monetary policy tightening will have likely put an end to this prolonged period. Inflation is expected to have peaked in 2022. The European Central Bank's projections of the average annual inflation rate suggest that inflation will subside in 2023 but remain above the 2% target rate until the second half of 2025. European economies are expected to stagnate in the coming years. The raising of interest rates in response to inflation will have a delayed effect, but this effect will be felt down the line in the form of slow economic growth rates.

Scope

• Sparkassen in Germany, Credit Agricole in France, and Lloyds Banking Group in the UK are the three largest banks in Europe in terms of retail deposits.
• On average, the European markets for retail deposits and for residential mortgages are as concentrated now as they were five years ago.
• The Netherlands has the highest levels of retail deposit market concentration in Europe, likely the result of the relatively long tenure of the average Dutch current account customer.
• Santander's acquisition of Banco Popular has significantly increased the level of concentration in the Spanish retail deposit market. The combined retail deposit market share of the largest five banks in Spain increased from 67% to 78% between 2016 and 2021.

Reasons to Buy

• Keep up to date with the macroeconomic trends impacting the retail banking sector in Europe.
• Understand where the best opportunities lie by comparing countries based on factors ranging from average net interest margin to market concentration.
• Develop an understanding of the differences between consumers' research methods, average tenure, and channel usage across different European countries.