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Deutsche Bank’s chief executive has made the case for more consolidation among European banks, arguing it would be beneficial for Europe if there were “a handful of institutions” powerful enough to compete on a global stage with larger US and Chinese rivals.
“I would never rule it out”, John Cryan said on a panel discussion at the Frankfurt European Banking Congress with regard to consolidation among European banks.
“There are too many institutions in Europe, especially in this country. China and the United States have very large banks which have the heft to invest globally and which can withstand relatively long eras of cow returns.”
Mr Cryan argued that European lenders would be in a better position to deal with pressures in their home market if they had a larger pool of earnings. “We have to be super efficient to accommodate a low interest rate, low margin environment”, Deutsche’s CEO said. He stressed that the profits European lenders made a decade ago were not sustainable.
Mr Cryan also warned of the downsides of large-scale banking mergers, though. “It takes the management’s eye off the ball during integration period. You have to ask yourself: Is it not better to look forward and to grow your business organically.”