Eurozone. EY Eurozone Forecast Winter 2013/14. Outlook for financial services

Transcription

1 Eurozone EY Eurozone Forecast Winter 2013/14 Outlook for financial services

2 Macroeconomic overview 2 Executive summary 3 Banking forecast 4 Amid ongoing challenges, banks begin to focus on growth Viewpoint: Robert Cubbage, EMEIA Banking & Capital Markets Leader Published in collaboration with 5 Robert Cubbage The Eurozone s banks may be entering uncharted waters, but they are far from powerless to prepare themselves.

3 Contents Insurance forecast 6 Near-term effects of Solvency II are likely to be muted, but some regulatory uncertainty remains Viewpoint: Andreas Freiling, EMEIA Insurance Leader 7 Andreas Freiling The conclusion of Omnibus II negotiations and agreement on an implementation timeline has pushed Solvency II back to the top of the industry s agenda. Asset management forecast 8 Scale and a diversified product mix will be increasingly important Viewpoint: Roy Stockell, EMEIA & Asia-Pac Asset management Leader 9 Roy Stockell Whatever the future holds, some things remain constant. Firms are becoming used to a nearcontinuous process of embedding regulatory change. 10 Country forecasts 10 Highlights Key issues Appendix 14

4 The run-up to Christmas and the start of 2014 proved to be a busy time for Europe s financial sector. Sadly, this was less to do with the festivities and more to do with the necessary groundwork to underpin the Eurozone s new regulatory framework. After lengthy delays, work around Solvency II recently re-animated by agreement over the Omnibus II Directive is starting to pick up again, but with the focus now increasingly on Pillar 3. However, there is no doubt that the European Central Bank's (ECB) asset quality review (AQR) and comprehensive assessment represents the largest workload. Keep in touch Follow us on Find us at ey.com/eurozone Contact us at fsoutlook@uk.ey.com Welcome Andy Baldwin EMEIA FSO Managing Partner Tel: abaldwin@uk.ey.com The effects of the AQR will be felt beyond the Eurozone, as over 120 of the largest banks find their global assets and capital positions coming under unprecedented scrutiny. There is widespread acceptance that the AQR process is likely to highlight the need for significant additional capital. The only debate is how much, and the nature of the resultant consequences.

5 The Cyprus experience demonstrated a new working template that the first capital losses will be borne by equity holders, followed by junior bond holders, before potentially inviting contributions from large depositors. While investors and depositors may be somewhat nervous at the moment, it s worth reflecting that the likely ripple effects will extend beyond banking alone. Since 2008, real interest rates have been anchored at all-time lows. Therefore investors, including many of Europe's smaller mutuals and pension funds, have been searching for yield to underpin returns and offset investment guarantees sold during better times. Highyielding bank debt has been an attractive destination for some, inadvertently exposing them to the risk of writedowns in the event of capital shortfall. While unlikely to represent any significant contagion risk for the broader European financial services market, it will likely trigger some shifts in investment strategy. So how might we expect banks that are faced with a capital shortfall to respond? A disposal programme is one option, but prices are yet to recover. The stronger banks will use the AQR as an opportunity to pick up assets in strategic growth markets. Alongside trade buyers, private equity funds, both in Europe and the US, are circling. They are attracted by the expectation of improving returns as the European economy recovers. What about raising fresh equity? In the current climate while possible it remains expensive and not without execution risk. Investors continue to look for predictability of returns. This is somewhat challenging for the banking sector, given the current fluidity of the regulatory and political landscape. The final option, once eligible investors and depositors have been bailed in, is to turn once again to the investor of last resort, the state. This continues to be nobody's preferred option. Details for the resolution and recovery framework within the Banking Union have been announced. We now know that we will not have a fully capitalized, EU-wide resolution fund and framework in place to deal with the consequences arising from the AQR process. So for now, national governments will continue to be first in line. This will be a challenge given the strained public finances in much of Europe. As so often in Europe, the financial and the political are intertwined. Similarly, the AQR s progress over the next year will be linked closely with the fate of the Eurozone s economy. The latest forecasts anticipate a mild but slow recovery, and raise the very real prospect of a two-speed Europe. Economic recovery depends on a banking system that is not only well capitalized, but also able to extend credit where it is needed. Right now, Europe s SMEs need it more than most. Recent research estimates that across Europe, SMEs represent 99% of businesses and rely on commercial banks for 80% of their total financing. If their access to credit is restricted by capital-constrained banks, then availability and accessibility of other sources of finance such as direct lending from asset managers could prove crucial to economic growth. With the benefit of hindsight, the timing of the AQR program, coming alongside a sluggish recovery is less than ideal. Many have drawn unfavorable comparisons with the comparatively rapid, coordinated recapitalizing of the US banking system. While painful, few would argue that the AQR is not necessary given the situation. More importantly for the future, the form and nature of the Banking Union Framework is now taking shape and, while not complete and possessing a few political compromises, few can deny it has been accomplished at a pace not normally associated with EU-wide financial services regulation. This should bode well for the future. EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 1

6 Macroeconomic overview The Eurozone economy is likely to have shrunk by 0.5% in 2013, only a very slight improvement on The disappointing data confirms our view that the recovery will be slow and fragile. We forecast GDP growth at 0.9% in 2014 and 1.5% a year in A weak recovery brings risk of deflation We had been expecting very weak activity toward the end of 2013, but quarterly growth of just 0.1% in Q3 was close to the bottom of our predicted range. As a result, the Eurozone economy is likely to have shrunk by 0.5% in 2013, only a very slight improvement on The disappointing data confirms our view that the recovery will be slow and fragile. We forecast GDP growth at 0.9% in 2014 and 1.5% a year in The latest forecast from the European Commission (EC) is similar for 2014 (1.1%) but more optimistic beyond that. We think that the EC is underestimating the hurdles the Eurozone will need to overcome to achieve robust growth. The 25 basis point (bp) interest rate cut by the ECB in early November 2013 will not have any significant impact on growth, especially as market interest rates are already very low. Low inflation will just mean low wage rises in the presence of high unemployment. Moreover, the ECB seems largely to dismiss the risk of deflation. This suggests it does not think that more monetary policy easing measures are needed. But we think the threat of deflation is real. Our forecast for Eurozone inflation in 2014 is just 1.1%, despite some assumed weakening of the euro exchange rate. There is little room for error. More monetary policy action and, in particular, communication designed to talk down the euro would be beneficial. High unemployment and limited investment will weigh on the pace of recovery A number of factors account for the muted growth outlook. First, unemployment is barely stabilizing. The unemployment rate stood at 12.1% in October 2013, or 19.3m people. Growth will be sufficient to stabilize unemployment, but not enough to create many new jobs. We do not expect any significant fall in unemployment before 2015, as companies use the return to growth to improve profitability and productivity instead. The proportion of long-term unemployed will continue to rise, resulting in a long-lasting skills erosion that will hamper growth in the medium term. Furthermore, the ability of businesses to expand through investment will be hampered by slow credit growth as credit conditions remain tight. Moreover, private sector deleveraging is expected to constrain spending. Unlike in the US, and to a lesser extent the UK, Eurozone private debt ratios have not yet fallen from pre-crisis levels. We estimate that the debt of non-financial companies stands at just under 135% of GDP at the end of 2013, hardly changed from a peak at 137% in In contrast, US companies debt stands at 80% of GDP. And in the UK, corporate debt has been brought down from 115% of GDP in 2008 to around 100% of GDP at the end of Moreover, while much reduced compared with 2012 and 2013, fiscal tightening in the Eurozone will continue to weigh on growth for the foreseeable future. 2 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

7 Executive summary Balance sheets 5% Banks have reduced the size of their balance sheets. We now estimate they were 5% smaller at the end of 2013 than at the end of Banking sector highlights Banks have reduced the size of their balance sheets. We now estimate they were 5% smaller at the end of 2013 than at the end of On average across the Eurozone, non-performing loans (NPLs) increased to 8% of total loans and will remain elevated in 2014 given weak economic growth and stable unemployment. Mortgage lending is an area of comparative strength. The stock of mortgages is forecast to rise by 1.1% to a record 3.9t in 2014 across the Eurozone. As the economy heals, banks should start increasing lending to businesses again, while other types of lending remain weaker. We expect modest 1.6% growth in business lending in The ECB's AQR is still the industry s main challenge. Industry commentators estimate that Eurozone banks may need to raise anything from $20b $200b of net new capital. Insurance sector highlights Life premiums $625b Life premiums across the Eurozone are forecast to rise above $600b in 2014 for the first time since 2008, to reach $625b. Life premiums across the Eurozone are forecast to rise above their 2008 peak for the first time in The gradual recovery in the economy and housing markets will lead to modest growth in general insurance business. Premiums are forecast to rise by 2.4% a year on average in However, we expect the high level of unemployment averaging 19.3m in 2014 to make policyholders very price sensitive, limiting insurance prospects. We forecast insurance profits to increase by 61% in , reaching 46b in 2017, boosted by recovery in equity markets. This still remains one-third lower than the 2007 peak in profits. Near-term effects of Solvency II are likely to be muted, but some regulatory uncertainty remains. Asset management sector highlights AUMs 5t In 2014, AUMs in the Eurozone are forecast to rise above 5t for the first time. We estimate that Eurozone assets under management (AUMs) increased by 6.9% in 2013 to 4,853b. In 2014, AUMs are forecast to rise above 5t for the first time. As risk appetite stabilizes and investors look beyond traditional asset classes, property funds are expected to grow by 14% between 2014 and AUMs in pan-eurozone equity funds are forecast to reach 2,287b by 2017, an increase of 70% from Multi-asset funds are set to outperform other asset classes, having grown 82% between 2012 and Fund of hedge funds continue to see their AUMs fall. We expect them to end 2013 with less than a quarter of the assets they had at the end of EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 3

8 Banking forecast Amid ongoing challenges, banks begin to focus on growth Managing risk, regulation and the need to improve efficiency remain at the top of the sector s agenda. But stronger balance sheets, a gradually strengthening economy and greater confidence in the future of the Eurozone should allow banks to start thinking about growth again. Consolidation of balance sheets in 2014; growth from 2015 Banks have reduced the size of their balance sheets. We now estimate that balance sheets were 5% smaller at the end of 2013 than at the end of Although assets will start expanding again, this will be a slow process. Growth of just 0.6% in 2014 and 2.9% in 2015 means that bank assets will not exceed their 2011 peak until Loan loss provisions also rose sharply in 2013, partly reflecting prolonged high unemployment and pressure on corporate profitability. On average across the Eurozone banking system, NPLs increased to 8% of total loans, and will remain elevated in 2014 given weak economic growth and stable unemployment. They should decline gradually as the economy recovers, falling to 5.3% of total loans in 2017 still well above the pre-crisis NPL ratios of around 2%. In Spain and Italy, NPLs are not expected to start falling until They should peak at 13.6% and 11.8% respectively in These two economies lag behind the Eurozone as a whole in the recovery cycle. Mortgage lending is an area of comparative strength In 2013, mortgage lending and house prices picked up more strongly than we expected in Germany and France. They have also not been as weak as we had been expecting in Spain, where some investors have returned. We forecast this to continue in 2014, helped by mortgage interest rates remaining close to record lows typically below 4%. The stock of mortgages is forecast to rise by 1.1% to a record 3.9t in 2014 across the Eurozone. Return to positive business lending growth in 2014 As the economy heals, banks should start increasing lending to businesses again, while other types of lending remain weaker. We expect modest 1.6% growth in business lending in This represents lower growth than expected at the time of our previous report because of a slight downgrade to our business investment forecast and a more cautious attitude by banks towards business lending than we previously expected. But lending to a few sectors, including construction and commercial real estate, will continue to fall. These sectors lag behind the recovery in the overall economy because they are perceived to remain riskier than average. Disparities in business lending trends will continue to be stark between Eurozone countries. Weak business investment, and therefore demand for loans, is expected to continue in the peripheral economies during Having fallen by 8.5% from its peak in the two years to 2013, lending to Italian businesses is expected to rise by only 0.9% in However, as the reforms being implemented in the peripheral countries bear fruit, loans to businesses should start to grow more markedly in Business lending in Spain should grow by 5% a year in , reaching 762b in High unemployment holds back consumer lending Consumer lending remains weak, reflecting the poor state of the labor market. We forecast modest growth in consumer lending of 1.2% on average across the Eurozone in Some countries, such as Italy, will see a slower return to growth, with no pickup until But pressure to reduce debt means that, even by 2017, consumer lending will remain slightly below its 2010 peak of 641b. For both consumer and business lending, risks are skewed to the downside. Should pressure, or the intention to reduce debt, be stronger than we currently envisage, demand for loans would be lower than presented in this forecast. The AQR is still the industry s main challenge The ECB has begun its assessment of every major Eurozone bank in preparation for taking over as pan-european supervisor in November To pass the AQR and stress tests, banks must have a Tier 1 capital ratio of 8% under stressed conditions. The AQR will be comprehensive, covering most aspects of bank assets. We expect the test to use a prudent approach, based on the recent European Banking Authority (EBA) standards for NPLs. 4 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

9 The ECB wants governments to put appropriate backstops in place to support undercapitalized banks. Any aid would come with tough conditions attached. Banks will have to plan ahead by reviewing valuations and provisioning, with options for raising capital or liquidity if required. There is still wide uncertainty over the likely impact. Industry commentators estimate that Eurozone banks may need to raise anything from $20b to $200b of net new capital in aggregate. But there are also other risks Another risk is the possibility that the ECB will follow its recent rate cut with another that would involve a reduction of the deposit rate. While this is a small risk, it would amount to charging banks to keep funds at the central bank, potentially affecting banks profitability. Another, potentially more significant, risk is the possibility of deflation. By raising the real cost of debt, deflation would increase the probability of defaults and reduce the quality of banks loan portfolios. Viewpoint Robert Cubbage EMEIA Banking & Capital Markets Leader Tel: rcubbage@uk.ey.com Projections for Eurozone bank lending over the next few years remain positive, but have fallen significantly since the last forecast. Business lending is now expected to grow by 1.6% in 2014, instead of 3.8%, and mortgage lending by 1.1% instead of 1.5%. The Eurozone s banks may be entering uncharted waters, but they are far from powerless to prepare themselves. The Eurozone s slow recovery from recession is one driver of weak lending growth, but the growing realization of the AQR s likely effects is also a major factor. October 2013's statements by the ECB may not have provided as much detail as the industry had hoped. The treatment of sovereign debt remains uncertain, and the ECB has not spelled out who will be doing what, where. But clarification that the AQR will cover European banks worldwide activities has made the scale of the exercise apparent, especially for banks with large operations in North America, Asia or Latin America. There is widespread expectation in the industry that the AQR will lead to restructuring. Applying common EU standards will inevitably create shocks, and it is no secret that a number of Eurozone banks are already increasing their provisioning. The ECB s insistence that member states should set up national backstops only reinforces the impression that some banks will need to raise additional capital. Spanish, Italian and Portuguese banks might be vulnerable, but so too could banks with significant exposure to central and eastern Europe. The Eurozone s banks may be entering uncharted waters, but they are far from powerless to prepare themselves. The sector s first priority should be the testing and remediation of asset data and reporting. The experience of players that were scrutinized by the Troika suggests that data requests will be detailed and demanding. More broadly, the AQR will inevitably complicate the challenges posed by initiatives such as Basel III and the Liikanen report. Reconciling this with the need to deliver growth may feel like an impossible task. So it is encouraging that many European banks are more optimistic than at any time in recent years. The improvement is particularly marked in Spain and Poland, but also visible in Germany and Belgium. Tighter regulation may make the Eurozone safer, but confidence is just as important if the banks are to play an active role in economic recovery. NPLs 8% On average across the Eurozone, NPLs increased to 8% of total loans and will remain elevated in 2014 given weak economic growth and stable unemployment. Mortgage lending 3.9t The stock of mortgages is forecast to rise by 1.1% to a record 3.9t in 2014 across the Eurozone. Business lending 1.6% We expect modest 1.6% growth in business lending in This represents lower growth than expected at the time of our previous report. EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 5

10 Insurance forecast Near-term effects of Solvency II are likely to be muted, but some regulatory uncertainty remains Now that a deal has been reached, uncertainties plaguing business decisions in the insurance sector during the negotiations on Solvency II have been resolved. The deal addresses these concerns in ways that are likely to limit the negative impact of Solvency II on market growth. Over time, the implementation of the new rules from 2016 will increase cross-border competition and make it easier for investors to compare businesses. But the adjustments facilitated by Solvency II are likely to take more time. These include a spur to product innovation in areas such as risk products, a greater emphasis on alternative asset classes and possible industry restructuring. The latter will include insurance subsidiaries in the banking sector. Moreover, the level of regulatory uncertainty in the sector remains significant. The International Association of Insurance Supervisors (IAIS) announced that it would introduce new global capital standards. While these would apply only to insurers that are internationally active and, according to the IAIS, take at least six years to devise and implement, the potential impact for the insurance sector is substantial. A further source of uncertainty relates to the impact of the AQR on insurance companies as investors in banks. Should the AQR reveal a less healthy picture of the banking sector than is currently held, banks stocks would likely fall, affecting insurance companies assets. Profits boosted by recovery in equity markets We estimate that the profits of Eurozone insurance companies increased by more than 20% in Profit growth should slow in the next five years but remain robust, supported in particular by increases in share prices. Overall, we forecast profits to increase by 61% in , reaching 46b. This remains one-third lower than the 2007 peak in profits. Boost to life premiums as Eurozone recession ends As the Eurozone emerges from recession, unemployment will eventually start to fall back from a peak of 12.3% in Household incomes will gradually rise, driving a recovery in premiums. Average life premiums across the Eurozone started to grow again in 2013, partially offsetting the very large fall recorded in the previous year. They should continue to pick up, increasing at an average rate of 3.3% a year between 2014 and They are forecast to rise above their 2008 peak for the first time in 2014, to reach $625b. However, the pattern across individual countries is expected to differ substantially. Premiums should rise strongly again in Italy in 2014, following an estimated jump of more than 14% in 2013, due to robust sales of traditional and unit-linked savings products. In contrast, premium growth in Spain is forecast below 2% in 2014 after an equally modest increase in By 2017, premiums are forecast to remain nearly 10% below their 2011 peak in Spain, compared with an average 6% increase during the same period in the Eurozone. Difficult economic environment limits general insurance prospects General insurance business has been affected badly by the recession, but there are some signs of improvement as economies begin to recover. Across the region, premiums are estimated to have broadly stabilized in By 2014, we expect that only Spain will still be experiencing declining premiums. However, in the other large Eurozone countries, growth will be very subdued compared with the pre-financial crisis era. On average, premium income across the Eurozone is expected to grow by 2.4% a year between 2014 and Rate increases will be difficult to obtain, with southern European motor lines hit particularly hard as the decline in car sales continues. We estimate that, at the end of 2013, new car registrations in Italy were down 50% from their 2007 peak. We forecast a further 7% drop in At the same time, high unemployment implies that policyholders remain very pricesensitive. In 2014, the number of people unemployed will average 19.3 million across the Eurozone a figure broadly unchanged from Rate increases for both motor and property insurance may be easier to achieve in the more robust core European markets, particularly in Germany, where unemployment is lower. In general, there will be better opportunities for rate rises as the pace of the Eurozone recovery picks up from 2015 onwards. 6 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

11 Viewpoint Andreas Freiling EMEIA Insurance Leader Tel: andreas.freiling@de.ey.com The outlook for Eurozone insurance remains comparatively stable. In one sense this is welcome. Markets are calm and the economy is slowly gaining momentum. Set against that, insurers see no prospect of relief from low interest rates. Forecasts for premium growth also The conclusion of Omnibus II negotiations and agreement on an implementation timeline has pushed Solvency II back to the top of the industry s agenda. remain subdued, with little sign of the growth in German non-life income being replicated in other markets. The picture is slightly more positive on the life side, where higher household income should lift premiums in Even so, life insurers still have a long way to go to recover the ground lost since But despite this static picture, a lot has changed. The conclusion of Omnibus II negotiations and agreement on an implementation timeline has pushed Solvency II back to the top of the industry s agenda. Omnibus II is a positive step for Europe s insurers. It brings welcome clarity over the January 2016 implementation date and should provide greater although not complete consistency between national regulators. It also addresses several areas of concern to the industry. It permits non-european operations to be locally supervised under provisional equivalence ; it applies a less stringent treatment to long-term guarantees; and it allows a 16-year phasing-in period. Nonetheless, the revival of Solvency II presents the industry with some urgent challenges. Hints from BaFin, Germany s financial regulatory authority, that up to 20 German life companies could face an existential threat from tighter capital rules, illustrates the strain that Pillar 1 is likely to place on the profitability of European insurers. It is not only German firms that are exposed to guarantees and duration mismatches. Firms across the Eurozone have a two-year window to assess the impact of the new rules on existing and new business, adjust their capital positions accordingly, and embed the requirements of Pillars 2 and 3 on governance, risk management and financial reporting. The backdrop of slow growth and pressure on profitability only make this process more important. Many insurers across the Eurozone are already restructuring their business models in response to the low interest rate environment. They now need to ensure that disciplines as varied as underwriting, claims, investment and distribution are re-examined in the light of the new clarity over Solvency II. The next two years will present the industry with a unique opportunity, but they will also put exceptional strain on its capital and resources. General insurance premiums 2.4% The gradual recovery in the economy and housing markets will lead to modest growth in general insurance business. Premiums are forecast to rise by 2.4% a year on average in Profits 61% Overall, we forecast profits to increase by 61% in , reaching 46b. This remains one third lower than the 2007 peak in profits. Unemployment 19.3m In 2014, unemployment numbers will average 19.3m across the Eurozone. We expect this level of unemployment to make policyholders very price sensitive, limiting insurance prospects. EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 7

12 Asset management forecast Scale and a diversified product mix will be increasingly important Asset managers face unparalleled challenges from low economic growth, low inflation and historically low interest rates. They also face increased scrutiny from regulators and clients, along with demands for additional legislation, accountability, transparency and low-cost solutions. Those best placed to succeed are firms that are small, focused and nimble, or large organizations with the scale and ability to offer a diversified product mix. Large firms have a significant competitive advantage over specialists in traditional asset classes that do not diversify into new products, such as infrastructure and portfolio solutions offering specific return and risk profiles. There is growing demand for customized solutions that the largest managers can offer at the lowest marginal cost. The largest five fund providers in Europe accounted for more than half of new business in the first six months of 2013, according to data from Lipper. European funds are enticing investments away from emerging economies Eurozone AUMs started to grow again in Q as investors became less concerned that the US Federal Reserve tapering its bond purchases would disrupt developed markets. In addition, European funds have benefited from a switch away from liquidity-sensitive emerging markets assets. We estimate that AUMs increased by 6.9% in 2013 to 4,853b. In part, this reflects higher equity prices, which were up by more than 15% on average in In 2014 AUMs in the Eurozone are forecast to rise above 5t for the first time. A lack of potential for valuation adjustment will limit the scope for further gains, reducing average AUM growth to 4.5% a year between 2014 and 2017 well below the historic average of 6.7%. Our forecast assumes that the slower pace of quantitative easing in the US from January 2014 onward was already anticipated, and that markets do not expect any other major shocks, such as the Eurozone sliding into deflation. But deflation is a risk. In such an environment, risky assets would significantly underperform our baseline forecast. Multi-asset funds are set to outperform other asset classes Relatively muted market reactions to shocks during 2013 indicate that investor risk appetites are now more firmly entrenched. Assuming this continues, we expect equity and multi-asset funds to see the largest AUM gains again in From a small base, we expect multiasset funds to grow rapidly, increasing 82% between 2012 and We expect them to continue to benefit from the trend for smaller pension funds and insurance companies to outsource asset allocation decisions. AUMs in pan-eurozone equity funds are forecast to reach 2,287b by 2017, an increase of 70% from By 2017, 39% of Eurozone AUMs will be invested in equities, up from 30% in Safe-haven investments will lose market share to riskier assets As risk appetite stabilizes and investors look beyond traditional asset classes, property funds are expected to grow by 14% between 2014 and In contrast, bond funds will see little expansion as investor demand for safe havens falls. We expect them to grow by 8% between 2012 and 2017, to 1,447b. By 2017, AUMs in bonds are expected to account for 25% of total AUMs, down from 30% at the end of Peripheral bond markets such as Italy and Spain will fare relatively better, attracting investors through higher yields to compensate for some residual debt-restructuring risk. Funds invested in Eurozone-focused money market funds are expected to fall until they stabilize in , declining from 1,003b in 2012 to 771b by This trend will be driven by the core markets of France, Germany and the Netherlands, where the shift in risk perception is likely to be greatest. Enhanced money market funds, which typically take on more credit risk, are gaining market share at the expense of standard money market products. Hedge funds set to attract new investments from 2014 Outflows from pan-european hedge funds should slow now that systemic concerns have receded. Strong hedge fund performance in 2013 should help to attract new investors. According to EY research three-quarters of European hedge fund managers report net inflows. The largest managers are most successful at attracting new capital with diversified product offerings and customized solutions for investors. Smaller, slow-growing funds will have difficulty surviving in the current environment, given the infrastructure and regulatory demands. 8 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

13 As the risk environment gradually returns to normal and individual asset performance again becomes less correlated, hedge funds will have more opportunities to make returns from stock-specific investments. We expect AUMs in hedge funds to reach 37b by 2017, exceeding 2011 levels, but not regaining their record high of 46b reached in Funds of hedge funds are reengineering their business models Funds of hedge funds continue to see their AUMs fall. We estimate that they ended 2013 with around a quarter of the assets they had at the end of Direct investment is increasing and is preferred by hedge fund managers, with intermediation shifting away from funds of funds to investment consultants. According to EY research, since 2012 the proportion of investors preferring to invest directly in hedge funds has risen from 33% to 52%, while the proportion preferring to invest via a fund of funds has fallen from 37% to 30%. This is a sign that the industry is maturing. With returns likely to remain subdued and investors finding access easier, the focus on the costs of intermediation will remain. Fund of funds are responding by seeking out newer, smaller managers, as well as greater concessions in order to offer smaller institutional investors an attractive package. As business from institutional investors has fallen, fund of funds managers are turning to wealthy individuals and to pooling small investors capital. Viewpoint Roy Stockell EMEIA & Asia-Pac Asset Management Leader Tel: rstockell@uk.ey.com Asset managers are enjoying the improving economic and financial environment. Capital markets appear to have stabilized and investor sentiment is becoming less easily shaken by bad news. Firms are increasingly confident in their ability to deliver value to investors. Whatever the future holds, some things remain constant. Firms are becoming used to a near-continuous process of embedding regulatory change. So has morning truly broken, or is this a false dawn? If volatility remains subdued, then a gradual economic recovery should see more capital flow into European equities during Then again, a rapid rally in equity values could be followed by a cooling of net inflows. And it is far from clear that European equities can deliver sustained long-term capital growth. As equity indices move back toward their 2008 levels, there are signs of underlying nervousness in the market. One indicator of fragile sentiment is the level of cash being held by European investors. While much of this should rotate into equities, recovering residential and commercial real estate is an attractive alternative. Capital continues to flow into infrastructure funds, and asset managers in several markets are exploring direct lending to mid-market companies. As well as developing their in-house credit skills, a number of firms are assessing potential distribution partnerships. More stable markets and stronger investor sentiment should make it easier for hedge funds to attract capital. The line between alternative and mainstream managers continues to blur, with institutional investors taking a more measured approach and increasingly conducting their own due diligence. At the same time, alternative managers are investing to bring their systems and controls up to the standard of larger firms. At a time of increasing risk appetite, a more mature European hedge fund industry has the opportunity to attract a new generation of investors. Whatever the future holds, some things remain constant. Firms are becoming used to a near-continuous process of embedding regulatory change. A new lease of life for the EU s Financial Transaction Tax (FTT) illustrates this point. Support from the newly formed German coalition means that the FTT is likely to be introduced in some form. This serves as a reminder that European asset management will never return to the pre-crisis world. Fund of hedge funds 75% Fund of hedge funds continue to see their AUMs fall and we estimate them to have ended 2013 with less than a quarter of the assets they had at the end of Property funds 117b As risk appetite stabilizes and investors look beyond traditional asset classes, property funds are expected to grow by 14% between 2014 and 2017, reaching 117b. Equities 70% AUMs in pan-eurozone equity funds are forecast to reach 2,287b by 2017, an increase of 70% from EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 9

14 Highlights France Banking sector performed better than expected in 2013, but slow growth hampers outlook Recovery in life insurance industry expected to continue Money market fund popularity declining Netherlands Business lending is growing, NPLs are low and falling Recession hits non-life insurance business Netherlands-focused assets expected to stagnate Germany Banks are benefiting from improvement in financial markets Growing economy is supporting insurance industry Lower demand for safe-haven German bonds Spain Outlook becoming brighter for Spain s banking sector General insurance recovery some way away Surge in AUMs Italy NPLs in Italy have risen Savings are flowing into life products Italian AUMs will benefit from increased optimism about the Eurozone s future 10 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

15 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 11

16 Key issues France Banking sector performed better than expected in 2013 but slow growth hampers outlook The outlook has improved, and mortgage lending and loans to non-financial corporations are picking up again. We estimate that they grew by 1.7% and 0.3% respectively in Banks were in a position to increase total assets to 8.1t, helped in particular by improving financial markets and receding fears about the future of the Eurozone. The downward revision of our economic forecast will weigh on activity in the banking sector. So although total loans are forecast to continue expanding, they will do so only slowly, growing just 1.7% in 2014 and 3.4% a year in Recovery in life insurance industry expected to continue Competing bank savings products took market share from life insurers in 2012, causing premium income to fall 15%. Single premium business revived in 2013 because many savers already held the maximum allowed in equivalent banking products. We estimate that life premiums rose by 5.4% in 2013 and forecast them to rise by a further 4% in Non-life business also declined in 2012, albeit by less than life business, as new car registrations fell by 14% and house prices slipped by 0.6%. Premiums have now started to rise moderately as the economy seems to have entered a period of sustained, but slow, growth. Therefore, we forecast average non-life premium growth of 2.3% over the next four years. Money market fund popularity is declining Although pan-european funds should see a rise in AUMs in 2014, we expect AUMs in French-focused funds to decline again in 2014 after falling 2% in We expect improving investor risk appetites to result in outflows from money market and bond funds. Assets in French money market funds, which account for almost half of all French AUMs, are expected to fall by 47b, or 16%, between 2014 and In addition, a 50bp rise in 10-year bond yields, forecast to materialize during 2014, will reduce the capital value of bond funds. Double-digit growth in multi-asset AUMs and 6% growth in equity AUMs will be insufficient to keep total AUMs growing. Money market funds 47b Assets in French money market funds, which account for almost half of all French AUMs, are expected to fall by 47b, or 16%, between Germany Banks are benefiting from improvement in financial markets We forecast robust growth in operating income from 2014 of around 9% per year for the next four years, repeating the improvement estimated in After falling in 2013 when companies unexpectedly cut back on investment, total loans should pick up from next year, driven by acceleration in economic activity and a decline in NPLs. Total loans should reach 3.9t by 2017, 20% above their 2008 peak. The proportion of bad loans is estimated to have peaked at 3.2% at the end of Record low unemployment, robust growth and sound corporate balance sheets mean that NPLs should fall steadily, to 2.8% by Growing economy is supporting insurance industry The German insurance sector had to contend with three large natural disasters during 2013 (flooding in June, hailstorms in August and October s storm Christian ). However, we still expect non-life premium growth to average 3.2% a year for the next four years, exceeding the Eurozone average of 2.4%. German premiums will benefit from a stronger domestic economy, faster house price inflation (3.5% a year on average in ) than the Eurozone average, and a stronger corporate sector. After a bounce back in 2013 that offset a steep fall in the previous year, we expect the pace of growth in life premiums to slow to an average of 2.7% over the next four years. Lower demand for safe-haven German bonds AUM growth in German-focused funds lagged behind that of pan-european funds in 2013, as investors sought value in peripheral European markets. We estimate that AUM growth in German bonds, considered a safe haven, slowed from 16% in 2012 to 3.5% in As the Eurozone economy continues to improve, German bond AUMs are forecast to fall by 5% in Equity and multi-asset AUM growth is expected to be above that for bonds in 2014, at 7.2% and 11.6% respectively, as investors continue to focus on wealth generating, rather than wealth preserving, assets. General insurance premiums 3.2% We expect German non-life premium growth to average 3.2% a year for the next four years, exceeding the Eurozone average of 2.4%. 12 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

17 Italy NPLs have risen The ECB s AQR appears to have triggered an early recognition of NPLs by Italian banks. Bad loans were higher than expected in the first three quarters of The corollary of early action on NPLs is that balance sheets should recover more quickly. We expect that NPLs will peak at 11.8% of total loans in 2014, well above the Eurozone average of 7.6%. The proportion of NPLs should then decline steadily as the economy recovers, falling to 6.8% by As with the economy overall, total lending is expected to lag behind the Eurozone average, with growth averaging 3.3% over the next four years. Deposits should grow faster as households take advantage of slowly increasing interest rates. We forecast deposit growth at 5.9% a year in Savings are flowing into life products We estimate that life premium income rose by 14% in Italy in 2013 due to strong sales of traditional and unit-linked savings products. This is because investors were attracted to a rising stock market, enabling the industry to make up around half the premium decline seen in 2011 and It is unlikely that such rapid growth can be sustained and we expect premium growth to slow to an average of 4.2% over the next four years. In contrast, we estimate that general insurance premium incomes declined a further 3.8% in They are expected to grow just 1.7% over the next four years as new car sales remain weak and falling house prices gradually stabilize. Italian AUMs will benefit from increased optimism about the Eurozone s future AUMs in Italian-focused funds are expected to grow more quickly than those of pan-european funds. Investors looking for value in the Eurozone periphery (now that the Eurozone s survival seems more likely) will push up AUMs in Italian-focused funds by a projected 9.3% in Multi-asset funds, equity funds and fund of funds are likely to see their assets grow more quickly during 2014 and 2015 than more defensive bond funds. NPLs 11.8% We expect that Italian NPLs will peak at 11.8% of total loans in 2014, well above the Eurozone average of 7.6%. Netherlands Business lending is growing and NPLs are low and falling The Dutch banking sector performed more strongly than might have been expected in 2013 given that the economy is likely to have contracted by 1.1%. A 2.9% rise in business lending offset a 5.5% fall in consumer credit. We expect total lending to rise, albeit by just 1.9%, as the economy emerges from recession in Banks balance sheets are strong, with NPLs at just 3.2% in This low proportion is expected to fall further to 1.6% by the end of 2017, well below the Eurozone average. Risks to this forecast relate to the ongoing deleveraging by households as house prices have continued to fall. Mortgage activity, in particular, could be weaker than we currently envisage. Meanwhile, the recent significant increase in unemployment to 7% could have a greater impact on NPLs than we currently forecast. Recession hits non-life insurance business Total insurance premiums are estimated to have fallen by almost 3% in 2013 in the Netherlands. The environment will remain difficult as the economy is expected to grow by only 0.3% in House prices are likely to decline again in 2014 and unemployment is not forecast to start falling until the second half of Against this weak backdrop, we expect no growth in general insurance premiums in 2014 and just 1.4% growth in Netherlands-focused assets expected to stagnate We expect AUMs in Netherlands-focused funds to follow growth of 1% in 2013, and then rise just 2% in The Netherlands is seen as a low-yielding core market, offering neither the returns nor the risks that would attract investors in the current environment. Although equity AUMs are expected to rise, we do not believe they will increase enough to generate a rise in total AUM. This is because of the weak nature of the recovery expected in the next few years. From 2014 onward, we forecast restrained growth of a little over 3% a year in Dutch AUMs, mainly in equities. Non-life premiums 0% As Dutch households focus on reducing debt and coping with a declining housing market, we forecast no growth in non-life premiums in 2014, and just 1.4% growth in Spain Outlook becoming brighter for Spain s banking sector The economic and banking reforms implemented in Spain are starting to bear fruit. This is most visible in a robust export performance. We expect business lending in Spain to fall by another 3.2% in 2014, bringing the total drop since 2008 to 35%. Even so, confidence in the banking sector is also returning. Very high unemployment, at 26.6% at the end of 2013, means that NPLs could continue to rise during We forecast them to reach a peak at 13.6% of total loans in But with a significant review of balance sheets already undertaken, we do not expect any significant negative surprise from the ECB s AQR. Conditions in the banking sector should start to improve more markedly from NPLs are forecast to fall below 8% of total loans by Total loans will rise by around 2.1% a year. General insurance recovery some way away The deep restructuring of the economy has also taken its toll on the general insurance sector. For example, new car registrations in 2013 were down nearly 60% from their pre-crisis peak. With unemployment forecast to be above 25% through to mid-2017, non-life premiums are expected to fall again in 2014 and to start rising only slowly from We forecast growth of 1.1% on average over the next four years. The environment is equally challenging for life insurance. With debts still amounting to more than 125% of incomes in 2013, households will concentrate on reducing debt over the next five years. Demand for life insurance products is therefore likely to be muted. We forecast growth in life premiums of 2% a year on average in Life premiums in 2017 will still be more than 4.5% below their 2009 pre-crisis peak. Surge in AUMs AUMs in Spanish-focused funds by far outperformed the Eurozone average in 2013, soaring more than one third, under sharp increases in asset prices and a return to investors attracted by the relatively higher yield prospects. Another strong year is expected in 2014, with AUMs forecast to expand by a further 15.4% to 124b. Bonds and equity funds performed equally well in 2013, and we expect a similar performance in The reforms implemented in the economy will pave the way for robust returns that will continue to attract investors. However, it will take many years to undo the losses incurred since By 2017, AUMs are forecast to reach 142b, still more than 30% below their pre-crisis peak. Business lending 35% We expect business lending in Spain to fall by another 3.2% in 2014, bringing the total drop since 2008 to 35%. EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 13

18 14 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition Appendix

19 Introduction Table 1 Forecast for the Eurozone economy (annual percentage changes unless specified) GDP Consumer prices Unemployment rate (level) Government budget (% of GDP) Government debt (% of GDP) ECB main refinancing rate (%) Exchange rate ($ per ) Source: Oxford Economics. EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 15

20 Banking Chart 1 Lending to non-financial corporations % year 16 Forecast Chart 3 Eurozone non-performing bank loans % total loans 14 Forecast 12 8 Netherlands France Eurozone average Germany Italy Spain 4 8 Eurozone Italy 6 4 France 12 Spain Source: Oxford Economics; ECB; national central banks. 2 Netherlands Germany Source: Oxford Economics; ECB; IMF; national central banks. Chart 2 Total operating income of Eurozone banks b 250 Forecast France Germany 100 Spain Italy 50 Netherlands Source: Oxford Economics; ECB. 16 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

21 Table 2 Forecast for the Eurozone economy Macro variables Nominal GDP growth (%) Real GDP growth (%) Nominal consumption growth (%) Nominal personal disposable income growth (%) Nominal private investment growth (%) Financial variables 3-month Euribor rate (%) year government bond yield (%, Eurozone average) Source: Oxford Economics. Table 3 Eurozone: banking Total assets ( b) 32,698 31,067 31,221 32,118 33,150 34,272 Total loans ( b) 12,196 11,785 12,118 12,578 13,092 13,618 Business/corporate loans ( b) 4,539 4,353 4,424 4,623 4,842 5,072 Consumer credit ( b) Residential mortgage loans ( b) 3,831 3,853 3,896 3,987 4,103 4,222 Non-performing loans as % of total gross loans Deposits (% year) Loans/deposits (%) Total operating income ( b) Source: ECB; Oxford Economics. EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 17

22 Insurance Chart 4 Eurozone interest rates Chart 6 Eurozone gross household wealth % 6 Forecast b 22,000 Forecast 5 20, year 18, , , ,000 3-month Source: Oxford Economics; Haver Analytics. 10, Source: Oxford Economics; Haver Analytics. Chart 5 Eurozone insurance industry profits 80 b Forecast Source: Oxford Economics; Datastream. 18 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

23 Table 4 Forecast for the Eurozone economy Macro variables Nominal GDP growth (%) Real GDP growth (%) CPI (% yoy) Labour market Total employment (thousands) 146, , , , , ,959 Employment in manufacturing (thousands) 21,589 21,235 21,132 21,143 21,152 21,127 Employment in non-manufacturing (thousands) 124, , , , , ,832 Unemployment (thousands) 18,059 19,199 19,287 18,988 18,584 18,112 Demographics Population (thousands) 333, , , , , ,246 Population of working age (thousands) 217, , , , , ,378 Population, 65+ (thousands) 62,834 63,959 65,040 66,100 67,186 68,270 Consumers Nominal personal disposable income (% yoy) Gross household financial wealth ( b) 16,596 17,684 18,299 19,079 19,930 20,750 Total household borrowings ( b) 6,817 6,763 6,758 6,848 6,992 7,174 Motoring Car registrations (thousands)* 7,032 6,692 6,695 6,811 6,945 7,060 Housing market House prices (% yoy) Corporate sector Company profits ( b) 2,030 2,049 2,091 2,163 2,238 2,312 Financial variables 3-month Euribor rate (%) year government bond yields (%) Equity market (% yoy) Source: Oxford Economics. *Car registrations and company profits refer to the sum of Germany, France, Italy and Spain. Table 5 Eurozone: insurance Life gross premium (US$b) % year Life gross claims payments (US$b) Life claims ratio (%) Non-life gross premium (US$b) % year Non-life gross claims payments (US$b) Non-life claims ratio (%) Profits ( b) Source: Oxford Economics. EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 19

24 Asset management Chart 7 Total AUMs Chart 9 Bond fund AUMs b 6,000 Forecast b 250 Forecast 5,500 Italy 5, , ,000 3, Germany 3,000 2, Spain 2, Source: Oxford Economics; Lipper Source: Oxford Economics; Lipper. Chart 8 Money market and hedge fund AUMs b b 1,200 Forecast 50 1, , Money market (left-hand side) Hedge fund (right-hand side) Source: Oxford Economics; Lipper. 20 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

25 Table 6 Forecast for the Eurozone economy Macro variables Nominal GDP growth (%) Real GDP growth (%) CPI (%) Financial variables 3-month Euribor rate (%) year government bond yield (%, Eurozone average) DJ Euro Stoxx 50 equity price Index 2,543 3,007 3,214 3,460 3,726 3,952 Households Wealth ( b) 16,596 17,684 18,299 19,079 19,930 20,750 Savings flow ( b) Pensions holdings ( b) 5,852 6,227 6,758 7,023 7,322 7,597 Source: Oxford Economics. Table 7 Eurozone: asset management Total assets under management ( b)* 4,542 4,853 5,170 5,369 5,589 5,796 % year Bonds ( b) 1,344 1,386 1,410 1,418 1,429 1,447 Equity ( b) 1,349 1,612 1,863 2,007 2,157 2,287 Fund of funds ( b) Hedge ( b) Mixed ( b) Money market ( b) 1, Property ( b) Source: Oxford Economics; Lipper FMI. *UCITS and non-ucits assets. EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 21

26 France Table 8 France: banking Total assets ( b) 8,076 8,149 8,301 8,525 8,772 9,039 Total loans ( b) 2,264 2,293 2,332 2,407 2,494 2,581 Business/corporate loans ( b) Consumer credit ( b) Residential mortgage loans ( b) Non-performing loans as % of total gross loans Deposits (% year) Loans/deposits (%) Total operating income ( b) Source: ECB; Oxford Economics. Table 9 France: insurance Life gross premium (US$b) % year Life gross claims payments (US$b) Life claims ratio (%) Non-life gross premium (US$b) % year Non-life gross claims payments (US$b) Non-life claims ratio (%) Profits ( b) Source: Oxford Economics. Table 10 France: asset management Total assets under management ( b)* % year Bonds ( b) Equity ( b) Fund of funds ( b) Hedge ( b) Mixed ( b) Money market ( b) Property ( b) Source: Oxford Economics; Lipper FMI. *UCITS and non-ucits assets. 22 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

27 Germany Table 11 Germany: banking Total assets ( b) 8,315 7,641 7,793 7,998 8,207 8,432 Total loans ( b) 3,239 3,136 3,389 3,554 3,715 3,871 Business/corporate loans ( b) 1,378 1,389 1,447 1,534 1,618 1,697 Consumer credit ( b) Residential mortgage loans ( b) Non-performing loans as % of total gross loans Deposits (% year) Loans/deposits (%) Total operating income ( b) Source: ECB; Oxford Economics. Table 12 Germany: insurance Life gross premium (US$b) % year Life gross claims payments (US$b) Life claims ratio (%) Non-life gross premium (US$b) % year Non-life gross claims payments (US$b) Non-life claims ratio (%) Profits ( b) Source: Oxford Economics. Table 13 Germany: asset management Total assets under management ( b)* % year Bonds ( b) Equity ( b) Fund of funds ( b) Hedge ( b) Mixed ( b) Money market ( b) Property ( b) Source: Oxford Economics; Lipper FMI. *UCITS and non-ucits assets. EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 23

28 Italy Table 14 Italy: banking Total assets ( b) 4,220 4,090 4,127 4,275 4,460 4,650 Total loans ( b) 1,990 1,917 1,938 2,007 2,094 2,181 Business/corporate loans ( b) Consumer credit ( b) Residential mortgage loans ( b) Non-performing loans as % of total gross loans Deposits (% year) Loans/deposits (%) Total operating income ( b) Source: ECB; Oxford Economics. Table 15 Italy: insurance Life gross premium (US$b) % year Life gross claims payments (US$b) Life claims ratio (%) Non-life gross premium (US$b) % year Non-life gross claims payments (US$b) Non-life claims ratio (%) Profits ( b) Source: Oxford Economics. Table 16 Italy: asset management Total assets under management ( b)* % year Bonds ( b) Equity ( b) Fund of funds ( b) Hedge ( b) Mixed ( b) Money market ( b) Property ( b) Source: Oxford Economics; Lipper FMI. *UCITS and non-ucits assets. 24 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

29 Netherlands Table 17 Netherlands: banking Total assets ( b) 2,490 2,306 2,231 2,305 2,379 2,459 Total loans ( b) 1,121 1,123 1,144 1,182 1,224 1,267 Business/corporate loans ( b) Consumer credit ( b) Residential mortgage loans ( b) Non-performing loans as % of total gross loans Deposits (% year) Loans/deposits (%) Total operating income ( b) Source: ECB; Oxford Economics. Table 18 Netherlands: insurance Life gross premium (US$b) % year Life gross claims payments (US$b) Life claims ratio (%) Non-life gross premium (US$b) % year Non-life gross claims payments (US$b) Non-life claims ratio (%) Profits ( b) Source: Oxford Economics. Table 19 Netherlands: asset management Total assets under management ( b)* % year Bonds ( b) Equity ( b) Fund of funds ( b) Hedge ( b) Mixed ( b) Money market ( b) Property ( b) Source: Oxford Economics; Lipper FMI. *UCITS and non-ucits assets. EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition 25

30 Spain Table 20 Spain: banking Total assets ( b) 3,423 3,105 3,004 3,084 3,211 3,364 Total loans ( b) 1,719 1,564 1,521 1,565 1,628 1,702 Business/corporate loans ( b) Consumer credit ( b) Residential mortgage loans ( b) Non-performing loans as % of total gross loans Deposits (% year) Loans/deposits (%) Total operating income ( b) Source: ECB; Oxford Economics. Table 21 Spain: insurance Life gross premium (US$b) % year Life gross claims payments (US$b) Life claims ratio (%) Non-life gross premium (US$b) % year Non-life gross claims payments (US$b) Non-life claims ratio (%) Profits ( b) Source: Oxford Economics. Table 22 Spain: asset management Total assets under management ( b)* % year Bonds ( b) Equity ( b) Fund of funds ( b) Hedge ( b) Mixed ( b) Money market ( b) Property ( b) Source: Oxford Economics; Lipper FMI. *UCITS and non-ucits assets. 26 EY Eurozone Forecast: Outlook for financial services Winter 2013/14 edition

31 EY Forecasts in focus: macroeconomic data and analysis at your fingertips App EY Forecasts in focus gives you swift access to the data and analysis from EY's Eurozone Forecast, Outlook for financial services, and Rapid-Growth Markets Forecast on your tablet. Download the EY Forecasts in focus app at ey.com/eurozone Compare economic indicators for the 17 Eurozone countries and 25 rapid-growth markets. Create tailored charts and tables for a broad range of economic indicators based on data from 2000 to the present and make forecasts up to Use the app to improve your own business planning and share customized information with clients. Web Highlights, data and other information from the Eurozone Forecast. Other EY publications Rapid-Growth Markets Forecast EY Eurozone Forecast