The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Still waiting for the tide to turn

The banking system is taking steps to shape up for European competition. But so far the changes are hardly sufficient in an industry plagued by overcapacity. Analysts argue that only mega-mergers will turn the tide. Philip Moore reports.

Recent events in Italy's banking industry - an alliance of two big banks, a sell-off of another and hints that staff cuts are in the wind - may appear revolutionary in a country where, traditionally, shareholder value has not been a prime consideration. But analysts argue that much greater rationalization is needed if the banks are to compete effectively in Europe.

The first ripple came in May when Banco Ambrosiano Veneto (Ambroveneto) and Cassa di Risparmio delle Provincie Lombarde (Cariplo) - Italy's largest savings bank - agreed a strategic alliance to establish the country's second largest banking group. At end-1996, the banks had combined assets of just over L250 billion ($148 billion). Moody's and other analysts responded positively to this symbolic message; the US ratings agency noted the alliance had "the potential for significant commercial and cost benefits in the longer term [and] represents an important step in the ongoing consolidation taking place in the Italian banking sector." Longer term, analysts agree the alliance represents the first step towards the privatization of Cariplo. It also represents a blow to the expansionary ambitions of Banca Commerciale Italiana (BCI), which had bid aggressively for a holding in Cariplo which it was "desperate to acquire", according to one Italian banker.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree