LONDON (Reuters) - Next year could bring a sharp acceleration in the scale and pace of crossborder consolidation in the European banking industry, top investment bankers said on Tuesday.
"This is going to be the most dominant theme for next year," Viswas Raghavan, head of Debt and Equity Capital Markets at JP Morgan Securities, told the Reuters Investment Banking Summit in London. "We will see (deals involving) national champions and global champions, and we will see transformational deals.
"Next year is when dinner will be served."
Banks with high stock valuations have a unique opportunity to use their stock to help fund deals.
"If you have to do something in the banking sphere using your stock do it now or forever hold your word," said Raghavan.
A string of crossborder deals over the past two years have included Banco Santander's (SAN.MC: Quote, Profile, Research, Stock Buzz) acquisition of British mortgage lender Abbey in 2004, UniCredit's (CRDI.MI: Quote, Profile, Research, Stock Buzz) purchase of Germany 's HVB in 2005 and BNP Paribas's (BNPP.PA: Quote, Profile, Research, Stock Buzz) acquisition of Italy's BNL earlier this year.
While significant, none of these transactions has qualified as transformational, or a deal which would completely alter the acquiring bank's prospects, in the view of financial analysts.
Raghavan declined to identify any bank in Europe that might be a potential target for takeover but said he believed most activity would probably focus on commercial banks.
"I see commercial banks buying commercial banks and investment banks as the final icing on the cake." Continued...
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