Banking: Private Equity’s Final Frontier?

Heightened activities in cross-border banking mergers is now signalling a new phase in European retail banking. Recent transactions such as the purchase of Abbey by Santander and of HvB by Unicredito are creating pan-European retail banks, a trend in consolidation that could create new mega-banks to challenge the likes of Bank of America and Citibank. There is another new element evolving – shareholder activism – which has played a key role in the ongoing ABN Amro process.

Could we potentially see a new force entering the banking M&A arena? Having invested heavily in most other industries, will the private equity community now turn its attention to banks?

Private equity could potentially access significant value from a variety of different targets including: banks with under-managed assets; banks where there is an opportunity to reduce significantly cost:income ratios through centralisation/ synergies; or where the bank is significantly