“Clearly we will see a trend of reduction of the retail network capacity because the current level is no longer justified under the current market conditions,” van Groningen says.
“We will see a different approach, of consolidation of the banking system because the problem of costs, of efficiency, can no longer be ignored. Now, banks’ main business is to manage non-performing loans and costs in general, not revenue increases, because revenue is flat at best.”
Banks are feeling cost pressure for several reasons that go from the VAT increase, to the increase in the contribution to the Deposit Guarantee Fund and to the risk costs.
At the end of the first quarter of this year, the banking system operated 6,137 branches, over 200 less than a year before, with several banks continuing to make adjustments in the last few months after assessing the survival chances of their branches.
Van Groningen says Raiffeisen’s current network of 545 units is reasonable, with one or two to be opened or closed in the future depending on particular circumstances.