Intelligent cost cuts are the only option in this market
By John Garvey & Miles Everson
Partners, PricewaterhouseCoopers
Well, it's that time again. It's the point in the economic cycle when bank senior executives and shareholders understand that the top-line growth that powered the industry for this economic cycle is ending. The pressure is on and shareholders are not in a patient mood. The choices for CEOs and their management teams are three-fold: Make an acquisition, or two or three; aggressively cut costs; or stand pat and take a beating in the markets. Only the second one has merit.
Cost cutting is occurring at almost every bank today. In many cases, the efforts are reactive, financially driven and won’t create a long-term, lower-cost platform. So, the key challenge is to implement the reductions without negatively impacting the operating business and its customers. Attached is a good hit list.
