Certain large German and Swiss banks were among the least efficient in Europe in the third quarter, S&P Global Market Intelligence data shows.

Of a sample of 37 European banks, Deutsche Bank AG was the least efficient as measured by its cost-to-income ratio at 86.01%, which was a 45-basis-point improvement from the year-ago 86.46%. The German lender said transformation charges for the period rose to €583 million, compared to €104 million in the previous year. These charges included a contract settlement and software impairments of approximately €450 million as a result of a cloud migration. Deutsche is targeting a cost-to-income ratio of 70% for 2022.

Credit Suisse Group AG came in second, with its cost-to-income ratio jumping to 84.59% from the year-ago 79.52%. The Swiss lender incurred credit losses of CHF 144 million following the twin scandals linked to its exposure to Archegos Capital and Greensill Capital (UK) Ltd., and it had CHF 564 million of litigation charges, including CHF 214 million related to the Mozambique tuna bonds scandal.

Commerzbank AG, another German bank, placed third on the list, with its ratio decreasing on a yearly basis to 79.16% from 85.58%. CFO Bettina Orlopp said the bank was able to reduce costs by about 5% year over year despite additional investments in digitalization, IT, infrastructure and regulatory functions.

Another large Swiss bank, UBS Group AG, placed ninth on the list, with a cost-to-income ratio of 68.76% in the third quarter.

Russian and Nordic banks were among the most efficient in the third quarter by the cost-to-income metric. Sberbank of Russia and VTB Bank PJSC had the best ratios at 32.33% and 36.44%, respectively. Both also generate income from nonbanking activities such as e-commerce and streaming services.

DNB Bank ASA's cost-to-income ratio improved by 419 basis points to 40.02%. It was closely followed by Nykredit A/S, Skandinaviska Enskilda Banken AB (publ) and Swedbank AB (publ).