The profitability of European banks has been fairly high across the board in the last couple of years, mostly thanks to the increase in interest rates. This follows several years where profitability was a pressing concern, particularly in the context of an international environment that presents numerous challenges. Factors such as the high segmentation of the banking system across national markets, varied national regulatory practices and competition from fintechs and other financial and non‑financial firms complicate the landscape for European banks. Progress towards a European savings and investments union (SIU) is crucial to preserve the competitiveness of the EU banking sector. In particular, actions that banks themselves could be taking should boost profitability, and hence their competitiveness.
The EU banking sector – European Commission
