by Jesรบs Aguado
MADRID (Reuters) – BBVA (BME) Chairman Carlos Torres said on Tuesday that a conventional banking merger in Europe is currently unlikely due to the lack of progress on banking union.
“It’s hard to see cross-border mergers because the half-baked banking union is not working,” Torres said at a financial event on Tuesday.
He added that it was “extremely disappointing” to see the banking union not progress, which is essential for a more efficient allocation of resources and investment.
In this context, the BBVA Chairman said that it was easier to pursue growth strategies by implementing and deploying digital banking models such as those of the Spanish lender in Italy.
Plans for a banking union were launched in 2012 to create a single system to regulate major eurozone lenders to ensure taxpayers are no longer in trouble to bail out failed lenders, as was the case during the global financial crisis.
Regarding traditional standardization, Torres said it’s an issue that “we don’t spend a lot of time resolving, except when there’s a clear opportunity (…) but it happens very sporadically.”
Torres’ comments came after BBVA CEO Honor Gaines said last week that further consolidation in the financial sector was important in an industry where scale was “critical”.
In 2020, BBVA canceled merger talks with its smaller Spanish rival Sabadell even though the market had always viewed it as an option given BBVA’s strong buffers.
