There is a degree of change that has taken hold of the European banking industry. In Italy and Spain, the mergers of Intesa Sanpaolo-UBI Banca, Santander-Banca Popular and most recently Caixabank-Bankia may have alerted Weber.
The publicity surrounding the Weber vision is more than just a simple communications debacle – it’s his second, having mulled the future of the CEO position two years before Sergio Ermotti was due to depart as CEO of UBS. The merger and acquisition plan looks incomplete at best and has been met with little enthusiasm.
The media talked of a wish-list of Weber – and it looks more than probable that his idea of turning UBS into a European champion will remain just that, wishful thinking.
Obstacles Are Many
Apart from the complexities of combining two big banks across two nations and the competition implications, it is also a question of regulatory hurdles and the inevitable jostling for the top jobs that will kill off any sense of enthusiasm that might originally surround such a merger plan.
The wish to create a European champion, as understandable and logical as it may sound, won’t impress the European Competition Commission. When Siemens and Alstom wanted to combine and for an engineering champion to rival the American and Chinese, the Commission issued a stern «njet».
Deutsche Bank is said to be top of Weber’s wish list. In reality, Deutsche Bank would never accept being taken over by a Swiss bank.
Deutsche Bank as Junior Partner Is Unthinkable
The German bank is key to the success of German industry and it exports, which means that any combination – be it through a merger or an acquisition – would be met with the stiffest of political opposition. Deutsche Bank won’t allow itself to be pushed into a junior role. It is more likely to increase capital to give itself the necessary ammo to buy big.
BNP Paribas is in an equal situation over the border in France. The big bank has no reason to give up its French identity, having posted a net profit of more than 8 billion euros in 2019 – about double the amount UBS managed to generate.
If Weber doesn’t have a first-rate relationship either to the Elysée in Paris, the Kanzleramt in Berlin or with Downing Street 10, his dream will remain just that.
Jostling for Power
Remains the idea of a merger among equals and a transnational giant with two headquarters. But the complexity of such a combination will make the logic of scale and synergies sound absurd. The jostling for positions and power would be stifling and investors are hardly going to embrace such a move.
It would not be the first time that a merger would fail for the egos of the bankers.
- << Back
- Page 2 of 2
