European banks remain fragmented and must seek cross-border mergers to prevent takeovers by US, Japanese and Chinese competitors, ABN Amro Holding NV CEO Rijkman Groenink said yesterday.
„The current fragmentation of the retail banking sector will make European banks sitting ducks,” Groenink said in remarks prepared for speech in Trieste, Italy. „Cross-border consolidation is a condition to maintain a strong European banking sector.” ABN Amro Holding NV, the biggest Dutch bank, is expanding abroad, especially in Italy, as commissions in its home market are among the lowest in the region.
ABN Amro won control of Banca Antonveneta SpA last year in Europe's fifth-biggest cross-border takeover since at least 1998. Bank of Italy Governor Antonio Fazio was forced to resign amid allegations he favored a rival bid from a domestic lender. „Large European corporations need strong European banks with a large capital base,” Groenink said. A preference for domestic combinations among directors in Italy, Germany and Spain may hinder international banks in making deals in these countries, Groenink said.
Lenders in these markets need more foreigners on their boards, he said. „When doing a deal, the person on the other side of the table is still likely to be a board member with a natural preference for domestic deals,” he said. Italy, where the Amsterdam-based lender is also the biggest investor of Capitalia SpA, remains the lender's „second home market in Europe,” Groenink said. „We are more and more convinced that we are making progress there.” (Bloomberg)