FRANKFURT, Sept 4 Consolidation in the banking
industry is inevitable, Deutsche Bank's co-chief
executive Anshu Jain said on Wednesday, as the costs of
litigation and a raft of new rules change the economics of the
financial services industry.
"There is a clear consolidation of the industry and there is
a simplification of the business model," Jain told a banking
The banks which will survive going forward are either
regional lenders, such as German savings banks, or banks with
focused business models and a global presence, he said.
"There is a tremendous opportunity to take market share
organically but, frankly, inorganically as well," Jain said.
Asked what role Deutsche Bank could play in the
consolidation, Jain said, "I think I was very clear that there
is a lot of work that lies ahead for the banking industry and
Deutsche Bank in particular".
Deutsche Bank is still working on meeting global rules on
capital and risk, Jain said, adding, "We are not at the
While before the crisis it was difficult to differentiate
between a state-controlled Landesbank and Deutsche Bank, the
industry has now forced a change which will benefit banks with
sound brands and strong capital bases, he said.
"No German bank is as global as we are, and no global bank
is as German as we are," Jain said.
Although consolidation is likely to continue, Jain said the
industry still lacks a mechanism to make large banks safer.
"I will not stand here and pretend that the 'too big to
fail' model has been solved," Jain said, referring to the
problem of how to shelter taxpayers from paying for a bailout.
"The entire sector has to get to the point, that no matter
what takes place the odds that we will come back to the taxpayer
will be reduced to nothing."
Although some banks are too big to fail, Jain said there was
a need for scale so that banks can operate on a global basis.
"There is a minium scale for efficiency. It is a little
misleading to think you can be small and globally competitive,"