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Eurozone banking: Strategies for eurozone survival

In the eurozone big is beautiful. The potential three-way merger of Banque Nationale de Paris, Société Générale and Paribas is just the latest example of the consolidation that will transform Europe's fragmented and largely unsophisticated banking industry. National borders and regulations have become irrelevant more quickly than anyone had predicted, leaving the way open for huge intra-market and cross-border tie-ups. But as banking goes the way of auto manufacturing and pharmaceuticals, what role is left for the smaller institutions - the regional specialists and the boutiques?

Conventional wisdom consigns banks in the middle ground to oblivion. To prosper, the argument goes, smaller banks must either accept eventual merger or acquisition, or find niches in which they can demonstrate that their size is an advantage rather than a handicap.

To see whether the consensus holds true, Euromoney journalists interviewed the senior executives of a representative sample of Europe's banking Mittelstand to get first-hand these institutions' blueprint for survival. Will any of these banks be here in three years?


A traditional institution that believes its market is impregnable is unlikely to prosper. UK institutions talked like BW after Big Bang. Just a handful remain

We mention the euro. "I just don't want to hear that word any more," grumbles Frank Heintzeler, chairman of the board of management at Baden-Württembergische Bank. "For us last year wasn't about the euro, it was about efforts to increase fee income and keeping abreast of the market during the autumn decline. It's been about our customers selling securities before the year-end for tax reasons. As for the euro, it was sewn up by mid-1998 as far as the board was concerned."

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