Consolidation and Strategic Positioning in Banking with Implications for Europe

Abstract

THE UNPRECEDENTED RESTRUCTURING and consolidation that are occurring around the globe are probably best characterized as a financial services sector in flux. Transactions are particularly numerous and breathtaking in the United States and Western Europe, but restructuring is also occurring in Asia. Most striking is the escalating scale of mergers in banking. In just the last few years, in the United States mergers have led to a consolidation of money center banks (for example, the Chase Manhattan and Chemical Bank merger, prior to their subsequent merger with J. P. Morgan) and the emergence of regional powerhouses (for example, the expansion strategies of BankOne and Nationsbank and their mergers with, respectively, First Chicago/NBD and BankAmerica). In Europe mergers have also been prominent. Although cross-border mergers are relatively infrequent—with exceptions in Scandinavia and the acquisitions across the Dutch-Belgian border, 1 such as the acquisition of the Belgian Bank BBL by the Dutch financial conglomerate ING—domestic mergers typically involve large universal banks and are often spectacular. Noteworthy examples include the marriage of the Union [End Page 37] Bank of Switzerland with Swiss Bank Corporation and the acquisition of Paribas by Banque National de Paris. In Japan spectacular mega-mergers have put the Japanese banks among the largest banks in the world ranked by book value of assets.