Rumors persist that Unicredit boss Andrea Orcel is planning to take over the smaller competitor BPM.
(Photo: Reuters)
Is it finally happening now? Is the great consolidation of the European banking industry, which has been the subject of so much talk, writing and speculation in recent years, really getting under way?
The latest debate on this hotly debated topic was triggered by the persistent rumors that the major Italian bank Unicredit wants to buy its competitor BPM.
It would undoubtedly be a big deal, Italy’s number two taking on number three. But will that be enough of a catalyst to kick-start the clean-up of Europe’s overcrowded banking market? Probably not quite yet.
The Italian deal would be another piece of the jigsaw puzzle in the consolidation of national banking markets that has been underway in countries like Italy and Spain for some time. A lot is also happening in Germany in this respect, but more at the level of small institutes such as savings banks and Volksbanken.
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The next step could be a consolidation of medium-sized banks in this country. The impetus for this is likely to come primarily from those institutions that are owned by financial investors. The private equity owners of banks such as Hamburg Commercial, IKB and OLB can look back on considerable success in restructuring the financial institutions, some of which have been badly hit. Now it’s time for the next step: exiting or scaling the business model.
>>Read here: Unicredit peeks at Banco BPM: Is a big takeover looming?
So the national consolidation is going on. The process at international level will take a while. Unicredit’s takeover plans in Italy alone will not be enough to cause deep concern on the foreheads of its European competitors. The only half-completed banking union and the patchwork of national laws and regulations in the European Union still argue against large international mergers.
Nevertheless, the discussions in the boardrooms are becoming more lively. Big banks like the French BNP are in excellent health, earn billions and pay handsome dividends. Such institutes would be ready for the next step.
What will happen to the Commerzbank stake?
The impetus for this could come from Germany. Recently, the new Federal Minister of Finance, Christian Lindner (FDP), emphasized in an interview with the Handelsblatt that the federal government does not see itself as a major shareholder in Commerzbank in the long term.
If the federal government’s stake and the entire bank are actually up for sale, the BNP could be interested. And when a bank dares to take the first step towards international consolidation, others will follow.
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