Banks face pressures to refocus their business models and cut
costs, pushing consolidation down the list of management
priorities, Frederic Oudea, chief executive of Societe Generale,
told a conference on Thursday.
“Consolidation is not at all on top of the agendas of bank
CEOs,” Oudea said. “We are a sector that is facing a huge
transformation (and) my first focus is on what I can achieve
organically.”
Cross-border banking acquisitions in the euro area peaked in
2007, when a consortium led by Royal Bank of Scotland <RBS.L>
bought ABN Amro in a deal that turned disastrous for all
parties.
Some bankers had predicted that the launch of a common
supervisor for large European banks in 2014 would create
transparency and uniform capital structures, paving the way for
cross-border combinations.
But big deals have been elusive as bankers grapple with new
capital requirements and regulations that make complex banks
more expensive to run.
While markets may put some banks under pressure to expand
through acquisitions, banks themselves are not yet ready, said
Federico Ghizzoni, CEO of Italy’s UniCredit, noting cross-border
banks are hard to operate and cost savings from consolidation
are difficult to achieve.
Another challenge dulling cross-border desire is the cost of
upgrading technology, Oudea said.
So-called fintech firms like Paypal and others are encroaching
on traditional banking turf and threaten to take away business,
just as banks invest billions in modernizing their IT
infrastructure.
Wolfgang Fink, co-chief executive of Goldman Sachs in
German and Austria, said the creation of a single European
banking market would increase chances for consolidation, but
anybody considering a cross-border move would be under close
market scrutiny.
Germany, for example, could be attractive for acquisitive
foreign banks, even if only due to the size of the economy. But
German banks may, if they get their houses in order and increase
profitability, be the ones who go shopping abroad, Fink said.
(Editing by David Holmes)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.![](column_spacer.png) |
|