A sign on the exterior of a BNP Paribas SA bank branch in Paris, France, on Friday, Aug. 2, 2024.
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France’s BNP Paribas on Thursday said there are simply too many European lenders for the region to be able to compete with rivals from the U.S. and Asia, calling for the creation of more homegrown heavyweight banking champions.
Speaking to CNBC’s Charlotte Reed at the Bank of America Financials CEO Conference, BNP Paribas Chief Financial Officer Lars Machenil voiced his support for greater integration in Europe’s banking sector.
His comments come as Italy’s UniCredit ups the ante on its apparent takeover attempt of Germany’s Commerzbank, while Spain’s BBVA continues to actively pursue its domestic rival, Banco Sabadell.
“If I would ask you, how many banks are there in Europe, your right answer would be too many,” Machenil said.
“If we are very fragmented in activity, therefore the competition is not the same thing as what you might see in other regions. So … you basically should get that consolidation and get that going,” he added.
Milan-based UniCredit has ratcheted up the pressure on Frankfurt-based Commerzbank in recent weeks as it seeks to become the biggest investor in Germany’s second-largest lender with a 21% stake.
UniCredit, which took a 9% stake in Commerzbank earlier this month, appears to have caught German authorities off guard with the potential multibillion-euro merger.
German Chancellor Olaf Scholz, who has previously called for greater integration in Europe’s banking sector, is firmly opposed to the apparent takeover attempt. Scholz has reportedly described UniCredit’s move as an “unfriendly” and “hostile” attack.
Germany’s position on UniCredit’s swoop has prompted some to accuse Berlin of favoring European banking integration only on its own terms.
Domestic consolidation
BNP Paribas’s Machenil said that while domestic consolidation would help to stabilize uncertainty in Europe’s banking environment, cross-border integration was “still a bit further away,” citing differing systems and products.
Asked whether this meant he believed cross-border banking mergers in Europe appeared to something of a farfetched reality, Machenil replied: “It’s two different things.”
“I think the ones which are in a nation, economically, they make sense, and they should, economically, happen,” he continued. “When you look at really cross border. So, a bank that is based in one country only and based in another country only, that economically doesn’t make sense because there are no synergies.”
Earlier in the year, Spanish bank BBVA shocked markets when it launched an all-share takeover offer for domestic rival Banco Sabadell.
The head of Banco Sabadell said earlier this month that it is highly unlikely BBVA will succeed with its multi-billion-euro hostile bid, Reuters reported. And yet, BBVA CEO Onur Genç told CNBC on Wednesday that the takeover was “moving according to plan.”
Spanish authorities, which have the power to block any merger or acquisition of a bank, have voiced their opposition to BBVA’s hostile takeover bid, citing potentially harmful effects on the county’s financial system.
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Check out the companies making headlines in midday trading. Novavax – Shares plunged more than 17% after the biotech company said the Food and Drug Administration put a clinical hold on its application for a Covid and influenza combination shot as well as a standalone flu vaccine. United Airlines – The stock soared 11% after the airline posted an earnings and revenue beat for the third quarter and guided for a strong fourth quarter. In addition, United said it is starting a $1.5 billion share buyback, its first since before the Covid pandemic. Morgan Stanley – Shares popped 7% after the bank reported quarterly results that beat Wall Street’s forecasts , boosted by higher profits from its wealth management, trading and investment banking divisions. The firm posted earnings of $1.88 per share, higher than the $1.58 expected by a LSEG analyst poll. Revenue was $15.38 billion versus the $14.41 billion consensus estimate. Cisco Systems – The technology networking stock advanced 3.3% to a 52-week high on the back of a Citi upgrade to buy from neutral. Citi said artificial intelligence can become a larger part of the business over time. Novocure – The stock rose 2.1% on the heels of the Food and Drug Administration’s approval of the company’s wearable treatment for metastatic non-small cell lung cancer, known as Optune Lua. ASML – Shares of the semiconductor equipment maker slumped 5.8%, building on a 16% loss from Tuesday after the Dutch company mistakenly released its third-quarter earnings earlier than expected . ASML Holding cut its sales outlook for 2025, citing a slower-than-expected recovery in segments beyond AI. J.B Hunt Transport Services – Shares added 3.4% after the company posted a top and bottom line beat. J.B. Hunt posted $1.49 earnings per share on $3.07 billion of revenue in the third quarter. Analysts polled by LSEG had forecast $1.41 in earnings per share on $3.02 billion of revenue. The company said demand for its intermodal service rose throughout the quarter. Aspen Aerogels – Shares gained 11% after the company announced that it received a conditional commitment for a proposed Department of Energy loan of up to $670.6 million. Aspen Aerogels also released preliminary results for the third quarter. For the period, the company is expecting revenue of around $117 million and adjusted EBITDA of around $25 million, above the $95.1 million in revenue and $14.1 million in adjusted EBITDA that analysts polled by FactSet were expecting. Prologis – The warehouse giant rose more than 4% after posting better-than-expected quarterly results . For the third quarter, Prologis reported core funds from operations of $1.43 per diluted share, above the $1.37 estimate from FactSet. In a statement, CEO Hamid Moghadam said: “Looking ahead, the supply picture is improving, and the long-term demand drivers for our business remain strong.” U.S. Bancorp – The stock moved more than 4% higher after U.S. Bancorp’s third-quarter earnings beat estimates, posting $1.03 per share versus the 99 cents per share that analysts were expecting, per LSEG. Revenue, however, missed estimates, coming in at $6.86 billion compared to the consensus estimate of $6.9 billion. General Motors – Shares increased more than 2% on the heels of the automaker’s agreement with Lithium Americas Corp. to establish a joint venture. The deal includes General Motors giving $625 million in cash and credit to the Canadian mining business. — CNBC’s Alex Harring, Hakyung Kim, Samantha Subin, Pia Singh and Michelle Fox contributed reporting.
Check out the companies making headlines before the bell. Cisco Systems — The networking technology stock added nearly 2% on the heels of a Citi upgrade to buy from neutral. Citi said artificial intelligence can become a bigger part of the business over time. Novocure — Shares soared roughly 22% after the U.S. Food and Drug Administration approved Novocure’s Optune Lua wearable treatment for metastatic non-small cell lung cancer. Morgan Stanley — Shares gained more than 3% after the bank reported quarterly results before the bell that beat Wall Street’s forecasts, helped by higher-than-expected revenue from its wealth management, trading and investment banking operations. The firm’s earnings came in at $1.88 per share, versus the $1.58 expected by a LSEG analyst poll. Revenue was $15.38 billion versus the $14.41 billion consensus estimate. United Airlines — Shares rose about 1% after the airline beat earnings and revenue expectations for the third quarter. United also announced a $1.5 billion share buyback, its first since before the pandemic. ASML — Shares of the Dutch chip equipment firm slid 4% before the bell, adding to Tuesday’s losses after it accidently released its third-quarter results a day early . The report was disappointing as ASML cut its 2025 sales forecast, suggesting weakness in markets other than those that serve AI applications. J.B Hunt Transport Services — Shares jumped more than 7% after the company’s third-quarter results topped expectations. J.B. Hunt posted $1.49 earnings per share on $3.07 billion of revenue. Analysts polled by LSEG had forecast earnings of $1.41 per share on $3.02 billion of revenue. The company said demand for its intermodal service rose throughout the quarter. — CNBC’s Sean Conlon, Alex Harring, Sarah Min, Michelle Fox and Hakyung Kim contributed reporting.