KPMG: Banking consolidation to continue - Spear's Magazine

KPMG: Banking consolidation to continue

The credit crisis appears to have done little to dampen expectations of pending international consolidation across the private banking and wealth management industry, claims a new survey out today. However, this appetite for acquisition belies some serious structural concerns that should be dealt with prior to many banks returning to the acquisition trail.

The credit crisis appears to have done little to dampen expectations of pending international consolidation across the private banking and wealth management industry, claims a new survey out today. However, this appetite for acquisition belies some serious structural concerns that should be dealt with prior to many banks returning to the acquisition trail.

However, this appetite for acquisition belies some serious structural concerns that should be dealt with prior to many banks returning to the acquisition trail.

Perhaps most notably, the sector is facing a tremendous squeeze on its margins, driven by falling asset values and yields, and a high cost base. Many banks will find it hard to substantially improve their profit margins in the short-term. This, combined with some prospective acquirers adopting a ‘wait and see’ policy and potential sellers being reluctant to accept current low valuations, may delay any surge in M&A activity.

Perhaps unsurprisingly then, the survey, entitled ‘Hungry for More’ and undertaken by professional services organization, KPMG, shows that, at least for the immediate future, organic growth remains a priority.

To read the rest of the story, visit kpmg.com and click here to download the survey



 

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