MADRID- Carlos Torres, the head of BBVA (BME:BBVA), said on Tuesday that a traditional bank merger in Europe is unlikely right now because the banking union hasn’t moved forward.
“Cross-border mergers are hard to see because the banking union, which is only half done, doesn’t work yet,” Torres said at a financial event on Tuesday.
He also said that it was “very frustrating” that the banking union wasn’t moving forward, since it was necessary for better use of resources and investments.
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In this situation, the head of BBVA said it was easier to pursue growth strategies by putting in place and using digital banking models like the one the Spanish bank is using in Italy.
Plans for a banking union were started in 2012 to create a single system for regulating the biggest banks in the euro zone. This was done so that taxpayers wouldn’t have to bail out failing banks like they did during the global financial crisis.
When asked about traditional consolidation, Torres said, “We don’t spend much time on it unless there’s a clear chance to do so, but that doesn’t happen very often.”
Torres’s comments came after BBVA’s CEO, Onur Genc, said last week that more consolidation was needed in the financial sector because scale was “critical” in that industry.
In 2020, BBVA ended talks to merge with smaller Spanish rival Sabadell, even though the market had always seen the deal as a possibility because of BBVA’s strong solvency buffers.
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