TOP European and U.S. banks axed 59,000 jobs last year as they restructured and cut costs, with headcount expected to shrink further in Europe as bosses strive to improve profitability that has been hit hard by tougher regulation.

    Lenders have also sold or shut businesses to narrow their focus to avoid falling foul of regulators concerned that some have become too big and complex.

    Analysts said that European banks, especially those in the eurozone, are likely to wield the knife again because they remain the most unprofitable in the world.

    “The screws will stay tight on headcount,” said Aymen Saleh, managing director at Boston Consulting Group in London.

    “A handful of banks globally have really looked at structural change and taken a big cut from their cost base. The majority have done some tactical and convenient belt-tightening to take out costs, but without really fundamentally changing how they operate or their business model.”

    Eighteen of Europe’s biggest banks cut a combined 21,500 jobs last year, but that was less than half of the 56,100 jobs cut by the same banks in 2013, according to data compiled by Reuters.

    Six of the biggest U.S. banks cut a total of 37,500 jobs last year, having shed 45,700 in 2013.

    That means more than 160,000 jobs have been cut across the 24 banks in the past two years. The six U.S. banks shed 7.3 percent of staff in the period, against 4.1 percent for the Europeans, the data show.

    Boston Consulting’s Saleh said that the majority of banks that have not restructured much could have to cut more jobs, though those that moved early could be in a position to add staff in selected areas.

    An IMF study last year of 300 large banks showed that only about 30 percent of eurozone lenders had a structure that was able to make a reasonable rate of return over time, compared with 80 percent of U.S. banks.

    Tens of thousands of staff were axed during and after the 2007/09 financial crisis, but a fresh wave of cuts swept through the banking industry in 2013 as trading income slumped and economic growth slowed.

    “In a world where growth is harder to come by, I’m more convinced than ever that costs will remain the strategic battleground for our sector over the coming years,” Barclays chief executive Antony Jenkins said last week.(SD-Agencies)