HSBC says govts key for short-term bank M&A
LONDON (Reuters) - Europe's biggest bank HSBC Holdings (HSBA.L) said most bank acquisition activity is likely to occur in parallel with governments and regulators in the next six to nine months.
HSBC Finance Director Douglas Flint said there will be opportunities to pick up businesses, but the need to recapitalise acquired assets made many deals unattractive.
"There will be ... opportunities as banks release capital by deleveraging and selling off businesses or in some cases seek protective mergers," Flint said on a webcast of a speech at a Merrill Lynch banking conference in London.
But he said the need to recapitalise a bank created a big risk and "that's one of the reasons why perhaps consolidation opportunities are not as attractive as might be seen at first light."
HSBC's focus remained on emerging markets and asset classes it has picked out as a strategic priority, he said.
Acquisitions among banks on a stronger footing, rather than rescue deals, could pick up once the credit crisis improves.
"As we begin to come out of this there will be mergers of strength as organisations that have come through well may see advantages in combining, given that some of the combinations that have been made from weakness are creating some pretty powerful universal banks in Europe and particularly in the United States," he said.
HSBC continues to benefit from its strong capital and liquidity, and had seen "quite significant behaviour" as it attracts corporate and retail deposits, Flint said.
(Reporting by Steve Slater; Editing by Quentin Bryar)
