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France’s BNP Paribas has highlighted the need for consolidation in the European banking sector to better compete with U.S. and Asian rivals. BNP Paribas Chief Financial Officer Lars Machenil emphasized the importance of creating stronger European banking champions. Italy’s UniCredit is pursuing a takeover of Germany’s Commerzbank, while Spain’s BBVA is actively seeking to acquire Banco Sabadell.

Machenil stated that there are too many banks in Europe, making competition less effective than in other regions. He called for consolidation to improve competitiveness. UniCredit has increased pressure on Commerzbank by acquiring a 21% stake, catching German authorities off guard. German Chancellor Olaf Scholz opposes the takeover attempt, describing it as unfriendly and hostile.

Domestic consolidation in Europe’s banking sector is seen as a way to stabilize the uncertain environment, although cross-border integration may be more challenging due to differing systems and products. Machenil believes that national mergers make economic sense, but cross-border mergers may lack synergies. BBVA’s bid for Banco Sabadell faces opposition from Spanish authorities over potential negative effects on the financial system.

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