If they stand any chance of making money from serving the small and medium-sized clients that American investment banks will never touch, European firms must gain scale by bringing together the continent’s disparate financial markets. That sounds like wishful thinking.
However, despite the gloom surrounding European banking, there are two sector leaders – Amundi, in asset management, and Kepler Cheuvreux, in equities – showing how continental consolidation can happen, even in the absence of big bank mergers.
Amundi and Kepler’s successes reflect the special importance of size to both asset management and equities. Europe’s Markets in Financial Instruments Directive II has made their business models even more attractive, as smaller brokers and asset managers die in greater numbers.
Amundi and Kepler have common origins in France’s close-knit market, and in the kind of federal structure epitomized by France’s biggest domestic bank, Crédit Agricole. Former Société Générale banker Jean Pierre Mustier, now UniCredit chief executive, has also been instrumental in the development of both firms.
It was in 2012, when Mustier was running UniCredit’s corporate and investment bank, that Kepler gained its first big break since the crisis.
