The banking system of the European Union demonstrates high stability from year to year. And this is despite the decline in the total number of financial institutions in the EU over the past 13 years. How many banks are in EU in 2023? You will find the answer to this question and other questions about the European banking sector below.
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How many banks operate in the EU?
In the middle of each year, the European Banking Federation (EBF) publishes a Facts & Figures report on the operation of the European Union’s financial system. Therefore, at the beginning of 2023, the most recent data is for 2021.
Based on data from the European Central Bank (ECB) for 2021, this statistical publication provides users with unique information on the structure, performance, and trends of lending and deposits of the European banking sector, as well as an overview by each country.
While European banks have proven to be resilient and able to weather unforeseen challenges, 2021 saw the continued structural transformation of the sector to improve efficiency and profitability. The total number of banks in the EU in 2021 was 5,263. Their number has decreased by 35% in 13 years of continuous decline.
This rationalization is linked to the digitalization of banking services, as well as the transformation programs of European banks to respond to changing customer behavior and improve process efficiency. The restructuring also affected bank branches: their number was reduced to about 139 thousand, 5.5% less than a year earlier. In the pre-pandemic year of 2019, there were 5,981 active banks in the European Union and 163,270 branches. About 10,000 bank branches are closed annually.
As of July 2022, there were a total of 5,171 banks operating in the European Union across 27 member countries, according to Statista. Across Europe, about 2.15 million people worked in credit institutions, with some bank employees servicing more than two hundred clients each.
Which EU country has the most banks?
In 2022, almost a thousand more banks worked in Germany than in any other European country – 1,427 credit institutions. This is despite a steady downward trend over the years. The German banking industry has total assets of more than 9.2 trillion euros.
The largest banks in Europe in 2023
HSBC is the largest bank in Europe in terms of market capitalization. The UK-headquartered bank also led Europe in terms of assets and Tier 1 capital.
Top 10 largest banks in Europe by total assets (billion euros) at the beginning of 2023:
- HSBC Holdings PLC, UK – 2597
- BNP Paribas SA, France – 2554
- Credit Agricole Group, France – 2,352
- Barclays PLC, UK – 1,648
- Banco Santander SA, Spain – 1,596
- Groupe BPCE, France – 1516
- Société Generale SA, France – 1,464
- Deutsche Bank AG, Germany – 1,324
- Intesa Sanpaolo SpA, Italy – 1,069
- Lloyds Banking Group PLC, UK – 1,055.
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The European System of Central Banks
The European System of Central Banks (ESCB) includes:
- European Central Bank
- national central banks of all 27 EU member states.
Separately, the Eurosystem is singled out, uniting the main banking structures of the 20 EU member states that have switched to the euro currency. The Eurosystem and the ESCB will coexist as long as there are EU member states outside the Eurozone.
The European Central Bank (ECB) is the core of the ESCB and the Eurosystem. It was created on June 1, 1998. The ECB is independent in exercising its powers and is a legal entity under public international law. Its headquarters is located in Frankfurt am Main, Germany.
The ECB has three decision-making bodies that also govern the ESCB and the Eurosystem:
- The Governing Council of the ECB – the main decision-making body. It formulates the Eurozone’s monetary policy of the euro area and adopts the guidelines necessary to ensure that the objectives are met. It formulates the Eurozone’s monetary policy and adopts the guidelines needed to ensure that the objectives are met.
- The Executive Council – the operational body of the ECB and the Eurosystem, which implements the Eurozone’s monetary policy in accordance with the decisions of the Governing Council and manages the day-to-day activities of the European Central Bank. It consists of a President, Vice President, and four other members.
- The General Council – the third decision-making body of the ECB. This is a transitional body that will exist until all EU member states adopt the euro, after which it will be dissolved.
There is also the Supervisory Board, created after the ECB was given specific tasks regarding the prudential supervision of credit institutions under the Single Supervisory Mechanism (SSM) to promote the soundness and stability of the banking system.
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How many bankers in Europe earn more than 1 million euros a year?
According to The Guardian, in 2021 (more recent data is not yet available) in Europe, a record number of bankers crossed the bar for their annual income of 1 million euros – 1957 people.
The European Banking Authority (EBA) reported in February 2023 that the number of bankers earning over 1 million euros yearly increased by more than 40%, from 1,383 in 2020 to 1,957 in 2021. Data on the income of European bankers began to be collected in 2010.
The figures no longer include the UK, which left the EU after Brexit in 2020. Prior to the exclusion, the UK consistently topped the ranking of bankers’ salaries. In 2017, 3,567 British bankers earned over 1 million euros.
The EBA stated that the increase in the number of European bankers with an income of more than 1 million euros is due to such factors:
- rapidly growing income from investment banking services
- further post-Brexit staff movements from the UK to the EU
- an increase in the general level of wages.
The regulator reported that 70% of the increase in the number of high-paid workers came from banks operating in Italy, France, and Spain.
The highest-paid banker of 2021 earned from 14 to 15 million euros in Spain. The EBA has not released their identity but has stated that a significant amount of variable remuneration corresponds to one severance pay. And this income is at least 466 times higher than the average salary in Spain.
Three more bankers (from Germany, Spain, and France) were paid 13-14 million euros each.
The majority of bankers with an income of more than 1 million euros live in Germany (589 people, or 30%). France came in second with 371 highly paid bank employees (19%), followed by Italy with 351 (18%).
The average value of bankers’ bonuses was just over 100% of their fixed salary, up from 86.4% the previous year.
The EBA data was collected in August 2022, as most performance bonuses in 2021 were awarded between April and June.
Luke Hildyard, director of the High Pay Centre, a think tank that advocates for fairer pay, notes that in an era of widespread deprivation and declining living standards, these figures show that the high incomes of the super-rich are not benefiting the rest of society. He believes that creating more millionaire bankers is a sign of economic collapse. In his opinion, this shows that the global economy is poorly structured, and a tiny number of corporations and super-rich people capture too much of the wealth created by everyone.
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