Losses & profits. How long can a break last? As long as you can hold your breath. For Wells Fargo, it will have lasted a quarter. In March 2020, the third American bank declared a pause in its restructuring. Like her colleagues, she recognized that the health and economic situation justified suspending the restructuring plans announced in 2019 and early 2020. But today, the situation is becoming critical. Losses accumulate on credits. Bloomberg analysts say bank could report second quarter net earnings of $ 9 million (8 million euros), against 6.2 billion for the same period in 2019. So the varnish cracks. According to Bloomberg, the bank is preparing to announce thousands of job cuts.
Caught between digitalization, which weakens the relationship with the client, and falling rates, which reduces the profitability of their operations, banking establishments are changing their economic model and must reduce their costs. Hence the cascade of restructuring announced in recent years. In 2019, an analysis by Wells Fargo projected 200,000 job losses in the American bank over the next decade.
Erosion is accelerating
The situation is more severe in Europe, where banks are less profitable and more constrained by regulation. In 2019, more than 50,000 job cuts were announced on the Old Continent, notably from Deutsche Bank and HSBC. Fortunately, the age pyramid helps pass the pill. In France, the number of departures now exceeds that of hirings, which hovers around 40,000 people per year. But erosion is accelerating.
The crisis will not fix anything in this affair. Analysts expect an explosion in loan difficulties with corporate bankruptcies. According to Financial times, the four major American banks could record $ 25 billion in credit losses in the second quarter. Added to this is the acceleration of the fickle behavior of customers. More and more young people and the wealthy are changing establishments, according to a study by Bain. As in the case of online commerce, with the health crisis, time has accelerated abruptly. According to the study, the attrition rate of the youngest has doubled in one year and during confinement: "50% of customers have carried out remote transactions that they usually carried out in agencies and wish to keep this mode of interaction. " We are now transported to 2025, and online banks finally manage to convince users.
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