Banks: Merger is the weapon for competitiveness

September will mean mergers in banking sector? It seems the trend that appears in the market, also listening to the words of the number one Deutsche Bank, John Cryan, who, denying that Deutsche Bank is considering a merger with compatriot Commerzbank, said that "In Europe, serving more mergers in the banking sector », during a conference in Frankfurt.

The difficult situation of the European banks is plain for all to see. "Today in Europe the banks are less risky than before the financial crisis," said Cryan, "but also much less profitable."

The cause of evil is on the one hand the negative impact of low interest rates (which he said central banks should take care to counter by launching new measures) and the other in the excessive number of banks, focusing in particular the finger at those German are too many, too small and with few margins. "It is undeniable that European banks are locked in a fundamental dilemma, including excessive competition, economic turmoil and low profits," summed Cryan, inviting the Old Continent institutions to reduce costs and improve on the technology front.

However, for the number one Deutsche Bank greater efficiency will not be enough to support the banking system to enable it to compete abroad. And it is here that comes into play the need for a process of concentration of the sector. In Europe more mergers are necessary in the banking sector, at the national level and across borders, "because only in this way we can be profitable in the long term and competitive internationally," said Cryan.

Cryan has however ruled out the possibility of a merger with Commerzbank and also denies the search for a partner in Germany: "Part of the work we are doing is to make the bank a little 'smaller," he said.
However, the merger has not been an invention of the experts, the press reports spoke of contacts that took place in early August between the first German private bank, and Commerzbank, institute partially nationalized during the financial crisis (15% of capital in hand public), and in view of a possible merger. Probably the time is not yet ripe; the two groups have established first of all that they need to fix things each to their own and then possibly sit at a table to agree on a common strategy.

In 2015, the former CEO of Commerzbank, Bild, would charge the analysts to examine possible variants of a merger, and on this Cryan has not confirmed nor denied, admitted that he had met the number one of Commerzbank Martin Zielke and on there have been internal discussions at Deutsche Bank, but has also specified that it was only dating partners and above all purely theoretical.