A sign on the exterior of a BNP Paribas SA bank branch on Friday, August 2, 2024 in Paris, France.
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french BNP Paribas said on Thursday there were too many European lenders in the region to compete with rivals from the United States and Asia, and called for the creation of more domestic banking champions.
BNP Paribas Chief Financial Officer Lars Machenil spoke with CNBC’s Charlotte Reid at the Bank of America Financials CEO Conference and expressed support for greater consolidation in Europe’s banking sector.
His comments come as Italy’s UniCredit ups the ante on an apparent takeover bid for Germany’s Commerzbank, while Spain’s BBVA continues to aggressively pursue domestic rival Banco Sabadell. .
“If you were to ask how many banks there are in Europe, the correct answer would be too many,” Machenil said.
“When our activities are so fragmented, the competition is not the same as what you see in other regions. So… we should basically consolidate and move things forward,” he said. added.
Milan-based UniCredit has increased pressure in recent weeks as it seeks to become the biggest investor in Germany’s second-largest financial institution, in which Frankfurt-based Commerzbank holds a 21% stake. are.
UniCredit acquired a 9% stake in Commerzbank earlier this month, but the potential multibillion-euro merger appears to have caught German authorities off guard.
German Chancellor Olaf Scholz, who has previously called for further consolidation of Europe’s banking sector, is firmly opposed to this apparent takeover attempt. Scholz reportedly described UniCredit’s move as an “unfriendly” and “hostile” attack.
Germany’s stance on the UniCredit raid has led some to accuse Berlin of supporting European banking integration only on its own terms.
Domestic consolidation
BNP Paribas’ Masunil said that while domestic consolidation would help stabilize the uncertainty in Europe’s banking environment, cross-border consolidation was “still a little ways off” due to differences in institutions and products. .
Asked whether this meant he believed cross-border bank mergers in Europe seemed far-fetched, Machenil said: “Those are two different things.”
“I think these things in the country make economic sense and should be done economically,” he continued. “When you actually look across borders, a bank that is only based in one country and only in another doesn’t make economic sense because there are no synergies.”
Earlier this year, Spanish bank BBVA shocked the market when it launched an all-share takeover offer for domestic rival Banco Sabadell.
According to Reuters, the head of Banco Sabadell said earlier this month that it was highly unlikely that BBVA would succeed in a multibillion-euro hostile takeover bid. Still, BBVA CEO Onur Genci told CNBC on Wednesday that the deal is “progressing as planned.”
Spanish authorities, which have the power to block bank mergers and acquisitions, have expressed opposition to BBVA’s hostile takeover proposal, saying it could have a negative impact on the region’s financial system.
