ADVERTISEMENT

Business

Bankers Take Fresh Look at Their Strategy With Deals Heating Up

(Bloomberg) -- Senior European bankers say mergers are moving up their list of priorities again, after two of the region’s largest lenders engaged in high-profile takeover battles.  

Dealmaking “is picking up” across the bloc’s financial industry, Danske Bank A/S Chief Executive Officer Carsten Egeriis said Thursday in an interview. He said his focus is on the Nordics region, though he sees activity picking up all over Europe.

Egeriis echoed comments from ING Groep NV Chief Financial Officer Tanate Phutrakul on Bloomberg TV earlier in the day, who said the lender is “always looking at M&A situations.” Deutsche Bank AG CFO James von Moltke said last week that takeovers are among the lender’s strategic options. 

The comments add to evidence that the unsolicited approaches of Spain’s BBVA for Banco de Sabadell SA, and of Italy’s UniCredit SpA for German rival Commerzbank AG, are prompting other lenders to review their strategic options. If the latter deal goes through, it would mark the largest banking takeover within the European Union in over a decade.

The region’s lenders have long suffered from low profitability and low valuations. That has changed since higher interest rates have led to soaring income, boosting share prices — and hence deal currencies — across the industry.

Deals outside Europe seem to be conceivable too, with UBS Group AG Chairman Colm Kelleher saying Tuesday the Swiss lender will eventually look to buy a wealth management firm in the US.

Still, fragmented regulation continues to pose a substantial hurdle to takeovers in the bloc. Government opposition in Germany and Spain to those transactions has demonstrated that national and regional interests can be a major obstacle as well. 

The banking executives generally indicated it’s unlikely any fresh deals will materialize imminently. 

Phutrakul said ING hasn’t found the right target yet and its “go-to strategy” is growth that doesn’t rely on deals. Von Moltke said the time isn’t right yet for Deutsche Bank and the lender first wants to deliver on turnaround promises made to shareholders.

ING previously lined up advisers to explore a potential takeover of Commerzbank, Bloomberg reported in 2019. The move came after formal talks between the German lender and Deutsche Bank had fallen apart a few months earlier. 

--With assistance from Jan-Henrik Förster.

(Updates with previous comment from UBS chair in sixth paragraph.)

©2024 Bloomberg L.P.