They have been preaching in the desert for two years. European authorities regularly call for marriages between European banks in order to bring out new champions on the Old Continent. Lost in 2018, the banking concentration has not yet come, due to regulatory constraints on the movement of capital and liquidity from one country to another.
In all financial services, the faucet of the M & A will have flowed only drip according to data compiled by Dealogic for "Les Echos". Barely 588 transactions took place in 2018 in Europe, the lowest since 1999. In amounts, these "deals" barely exceed 60 billion euros, the worst performance in five years.
The acquisition of a bank by one of its peers was very rare in 2018. The largest operation of its kind did not even take place in the Union. She returns to the Dubai NBD bank who got her hands on DenizBank in Turkey for 2.6 billion euros. On a smaller scale, the Polish market has also attracted, as evidenced by the agreement to take over Raiffeisen in Poland by BNP Paribas (for 775 million euros) or that of Euro Bank by Bank Millenium for 425 million euros.
For the rest, bank assets mainly attracted management companies, particularly for the recovery of bad debt portfolios . The opportunities are many because the European banks – in Ireland, Italy or Greece – still bend under the weight of these arrears, valued at 820 billion euros at European Union level and the European Central Bank (ECB) urges them to get rid of it.
Intesa Sanpaolo thus turned to the Swedish Intrum Justitia to give him a portfolio of bad debts, valuated 3.1 billion euros. Similarly, Monte dei Paschi sold a € 1.4 billion NPL portfolio in January 2018 to Quaestio Capital.
New types of investors
Other names from the asset management have gone further by going directly to the capital of banks. For 1 billion euros, a group of investors, including Cerberus and JC Flowers, took over 94.9% of the German regional bank HSH Nordbank. This same amount will allow Blackstone to get a hold of 60% of Luminor, a center focused on the Baltic countries.
Activists enter the scene
Another trend of the year, activist investors began to nibble the capital of banks become cheap, as their stock prices suffer. The Sherborne fund offered 5.16% of Barclays (in March 2018), as well as Cevian at Nordea in mid-December. Will these more aggressive investors be more successful than regulators in launching bank consolidation in Europe?
Joël Chapellier, Head of Financial Institutions at JP Morgan Investment Bank "If the weak valuations of the European banking sector offer a suitable target for hedge funds, the levers they can activate are very few. It's time to improve balance sheets and productivity, and despite very low multiples, it seems that there are still very few investors willing to take the gamble of a rebound in bank shares. ".
Edouard Lederer with Anne Drif