France’s BNP Paribas says there are too many European banks

France’s BNP Paribas on Thursday mentioned there are just too many European lenders for the area to have the ability to compete with rivals from the U.S. and Asia, calling for the creation of extra homegrown heavyweight banking champions.

Talking to CNBC’s Charlotte Reed on the Financial institution of America Financials CEO Convention, BNP Paribas Chief Monetary Officer Lars Machenil voiced his assist for larger integration in Europe’s banking sector.

His feedback come as Italy’s UniCredit ups the ante on its obvious takeover try of Germany’s Commerzbank, whereas Spain’s BBVA continues to actively pursue its home rival, Banco Sabadell.

“If I might ask you, what number of banks are there in Europe, your proper reply could be too many,” Machenil mentioned.

“If we’re very fragmented in exercise, due to this fact the competitors will not be the identical factor as what you would possibly see in different areas. So … you mainly ought to get that consolidation and get that going,” he added.

Milan-based UniCredit has ratcheted up the strain on Frankfurt-based Commerzbank in current weeks because it seeks to grow to be the largest investor in Germany’s second-largest lender with a 21% stake.

UniCredit, which took a 9% stake in Commerzbank earlier this month, seems to have caught German authorities off guard with the potential multibillion-euro merger.

German Chancellor Olaf Scholz, who has beforehand referred to as for larger integration in Europe’s banking sector, is firmly against the obvious takeover try. Scholz has reportedly described UniCredit’s transfer as an “unfriendly” and “hostile” assault.

Germany’s place on UniCredit’s swoop has prompted some to accuse Berlin of favoring European banking integration solely by itself phrases.

BNP Paribas’s Machenil mentioned that whereas home consolidation would assist to stabilize uncertainty in Europe’s banking setting, cross-border integration was “nonetheless a bit additional away,” citing differing programs and merchandise.

Requested whether or not this meant he believed cross-border banking mergers in Europe appeared to one thing of a farfetched actuality, Machenil replied: “It is two various things.”

“I feel those that are in a nation, economically, they make sense, and they need to, economically, occur,” he continued. “Once you take a look at actually cross border. So, a financial institution that’s primarily based in a single nation solely and primarily based abroad solely, that economically does not make sense as a result of there aren’t any synergies.”

Earlier within the 12 months, Spanish financial institution BBVA shocked markets when it launched an all-share takeover provide for home rival Banco Sabadell.

The top of Banco Sabadell mentioned earlier this month that it’s extremely unlikely BBVA will succeed with its multi-billion-euro hostile bid, Reuters reported. And but, BBVA CEO Onur Genç instructed CNBC on Wednesday that the takeover was “shifting in keeping with plan.”

Spanish authorities, which have the ability to dam any merger or acquisition of a financial institution, have voiced their opposition to BBVA’s hostile takeover bid, citing probably dangerous results on the county’s monetary system.