Structure and economic contribution of the banking sector

The data has been compiled from publicly available information released by the European Central Bank, European Commission, Eurostat, the European Banking Authority, International Monetary Fund, national competent authorities and members of the European Banking Federation. Unless otherwise noted, all graphs and tables have been produced to illustrate the figures mentioned in the relevant chapters.

Number of Credit Institutions

The downward trend in the number of EU-28 credit institutions, which started in 2009, continued in 2016 falling to 6,596, a decline of 6% compared to the previous year and a reduction of 1,929 in total since contraction started. Most of the consolidation has occurred within credit institutions legally incorporated into the reporting country, where the stock has fallen by 26% since 2008. This trend includes factors such as mergers in the banking sector with a view to enhancing profitability and greater economies of scale.

The countries having experienced the largest contraction in absolute terms in 2016 were the Netherlands (-113 units), Germany (-72 units), and Austria (-63 units), according to the ECB. Only Slovakia (+2 units) increased the number of credit institutions while Sweden remained unchanged. The number of credit institutions in the EFTA countries fell from 423 to 418 in 2016.

Branches and subsidiaries

The rationalisation taking place in the EU banking sector also involved bank branches as the number of credit institutions branches continued to shrink, falling to about 189,000 by the end of 2016. The total loss of more than 48,000 branches closed since 2008 equals a contraction of 20.4%. Compared to the previous year, branches in the EU-28 decreased by 4.6% or about 9,100 branches.

As the overview of payments and digital banking shows, banking customers have widely and enthusiastically adopted electronic payments as well as online and mobile banking. This has reduced the importance of widespread bank branch networks, allowing banks to scale back their physical presence.

Although the overall number of subsidiaries continued declining for the ninth consecutive year, falling by 2.9% to 601, the lowest level since the ECB’s data series began in 1999. While the number of subsidiaries of credit institutions from other EU countries fell by only five in 2016, the total of 343 was 38% below the peak in 2001. The 4.8% drop in the number of non-EU credit institutions’ subsidiaries was the sharpest year-on-year fall since 2004 and, at 258, reached the lowest level since 2006.

Bank staff

By end-2016, EU-28 banks employed about 2.8 million people, about 50,000 fewer than in 2015 and the lowest level since the ECB’s data series began in 1997. The five largest EU economies continue to be the five countries with the largest number of employees in the banking sector employing some 68% of the total EU-28 staff employed. Including EFTA countries, the number of staff employed in the banking sector was more than 2.95 million.

Also reflecting a contraction in the banking sector, the average number of inhabitants per bank staff in the EU Member States rose from 179 in 2014 to 183 in 2016.

Economic contribution

Banking and related financial services activities make a significant contribution to the EU’s economy.

Despite the drop in bank employment in recent years, about one in every 100 jobs in the EU was a banking job in 2016.

In the past decade, between 3% and 4% of the value of compensation of employees and gross value added in the EU economy has come from financial services (excluding insurance and pension activities).

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