3 Consolidation and the ever-shrinking cake Let’s begin with consolidation. The gradual downsizing of branch networks and institutions is a clear signal that consolidation is already under way. But there is still some way to go yet. It would appear logical to press ahead with consolidation, particularly with a view to boosting the costincome ratio.
According to this metric, Germany’s banking sector is still firmly entrenched among the worst in Europe. For that reason, measures aimed at cutting costs and increasing operational efficiency will probably have to remain a firm fixture on credit institutions’ agendas. Mergers and acquisitions are one way of unlocking substantial cost savings.