Fitch: Mid-Tier European Banks M&A More Likely than Big Banks

The banking sector in Europe could more easily see the merger and acquisition (M & A) only among the small and medium-sized banks, not the big banks, such as Deutsche Bank and Commerzbank, which were recently riding rumours of a merger.

"Mergers and acquisitions among mid-tier EU banks are more likely than large-scale deals such as between Deutsche Bank and Commerzbank, whose recent discussions were reported in the media," Fitch said.

Do not forget that the more restrictive Basel rules and the European banking supervision require capitalisations indices higher and that many large institutions have been forced to raise capital from shareholders.

In the EU more than 3,000 banks operate but about half are savings banks or mutual support cooperative banking groups. The small institutions not related to that group could find "difficult to operate independently in a challenging environment of low interest rates, increasing regulation and low growth." For Fitch the eurozone GDP will register a 1.4% increase in 2017 and 2018.