CEO of Intesa: European banks must unite to compete with the US and China

The European banks need to join forces if the region is to resist competition from USA and Chinabut without a banking union the cross-border mergerssaid on Monday the director of the largest Italian bank, Intesa Sanpaolo.

Speaking to CNBC television, Carlo Messina said that it is currently difficult to achieve the cost savings that investors expect a merger to produce in the case of a cross-border operation, noting that they would like to see an increase in dividends and profits. per share.

“Synergies are needed, and the area in which investors are looking for synergies is costs”he said, adding that it is not easy “achieve true cross-border synergies on the cost side.”

“I think we will have to wait for the banking union to see real and meaningful cross-border consolidation. But we have to do it, otherwise Europe will remain an insignificant group of countries,” he claimed.

Echoing the statements of Andrea Orcel, executive president of UniCredit, Italy’s second largest bank, Messina affirmed that large entities are necessary to sustain the bloc’s economy.

Orcel stated last month that Europe is committed to “irrelevance” if it did not work to unify its capital markets and create a banking union that would allow lenders to compete with their American rivals and adequately finance the region’s economy.

Messina said Intesa would find it easy to save costs by expanding nationally, but ran into antitrust problems after acquiring smaller rival UBI in 2020-2021. Likewise, he added that Intesa has a 30% market share in deposits and investment funds, and 20% in insurance products.

“We have a significant antitrust problem, so this will probably make it impossible for us to make acquisitions in Italy, other banks may try”said.

Source: Reuters