2022 record-breaking year for European retail banks’ income per customer and productivity per employee

Deniza Cristian 24/04/2023 | 13:22

Leading global consultancy Kearney has today released the fifteenth edition of its annual European Retail Banking Radar, which tracks the performance of 89 retail banks across 21 European markets.


In the face of uncertain macroeconomic conditions and continued inflationary pressures, the research has found managing costs, investing in digitisation and maintaining customer trust critical to maintaining performance in 2023.

Strong year for banks in 2022

The latest report shows that 2022 was a record-breaking year for European banks, with rising interest rates providing a tailwind that has boosted income across the board.

At €650, income per customer was at its highest level since 2015. Amongst the larger economies, the UK shows the strongest growth of 16.5% compared to 3.8% in France, 3.5% in Germany and 4.6% in Italy. Eastern Europe overall also showed strong growth of circa 18.7%.

Productivity over the last 15 years has also dramatically increased, with productivity per employee in 2022 almost double (197%) what it was in 2008, and productivity per branch almost triple (284%).

Cost management remains critical

Improvements in technology and digitisation have clearly supported this jump in productivity and have allowed for a lower physical footprint and reduced headcount. Overall headcount at European banks has reduced by 16% between 2008 and 2022, and the number of branches has reduced by 42%. However, this has not translated into a lower overall cost base, which increased by 2.3% to €188 billion last year.

Fortunately, this increase was significantly lower than income growth, meaning that the Cost Income Ratio for European banks was 58.8% – its lowest level in the past 15 years. Banks must continue to work on containing and reducing costs if they are to build on the success of 2022. This task will become challenging in an environment with significantly higher inflation than at any point in the past 10 years.

Further European findings include:

  • Income growth (7%) significantly outpaced the business volume of growth (4%) for the first time in the history of the Retail Banking Radar
  • Overall risk provisions as a percentage of income increased slightly from 5% in 2021 to 6.5% in 2022
  • Total profit in 2022 increased 11.9% YoY
  • Overall client deposits increased 3.7% YoY
  • Income per employee increased 10.2% in 2022 YoY
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