Outlook: French connection gets banks guessing
Tuesday 02 February 1999
Never mind, it is a national French champion, knocking Credit Agricole off its perch as the number one bank on the other side of the Channel. What's more it may just be the kick in the derriere the overbanked French market needed.
The creation of SG Paribas gives the French a seat at the big boys' table. It also neatly dispenses with one of the main obstacles to the French government's sale of Credit Lyonnais. No wonder the finance minister Dominique Strauss-Kahn was jumping for joy at the merger yesterday.
As with the SBC-UBS merger, it is not hard to see where most of the pain will be felt among the 78,000-strong workforce. The overlaps are mainly in London where both companies run large investment banking operations from sumptuous offices. Paribas may be longer established in the City. But SG has been making up ground fast. It has added the banking division of Hambros to its equities business, Strauss Turnbull, and is bankrolling Nicola Horlick's dream of creating a fund management business with pounds 5bn under management.
The target of pounds 560m in cost savings within three years gives the management plenty to aim at. Paribas' opulent new headquarters in Marylebone may be one early casualty while the wine bars of the City should be filling soon with fixed income dealers and equity analysts drowning their sorrows and looking for new employment.
Inevitably questions will now be asked of that dwindling band of European banks which still remain outside larger national or transatlantic groupings. Consolidate or die certainly makes for an easy catchphrase. Given the pace of merger activity among Continental banks, there is a danger that Don Cruickshank's review of the UK banking scene could look even more parochial by the time he publishes his conclusions.
But the UK banking industry is structured in a way that makes it difficult, if not impossible, to adopt the same national solutions as the Swiss, the French and the Spanish, as the failure of Barclays and NatWest to merge shows.
The word from Paris yesterday was that SG Paribas has ambitions to spread its wings further. There is also talk that Banque Nationale de Paris will be obliged to look overseas for a partner. Sitting on their fat market capitalisations and hemmed in by domestic monopoly constraints, it may be time for the UK clearers to strike pre-emptively across borders.
- 1 Cyclist who knocked down three-year-old girl says his life has been 'destroyed'
- 2 A politically correct lefty goes to see Top Gear live – you'll probably believe what happened next
- 3 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
- 4 Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
- 5 Snoop Dogg on why he doesn't regret displaying misogyny towards women
Isis 'jihadi bride' claims forced sex with Yazidi girls is never rape because Koran condones it
Woman accidentally shoots herself in the head while posing for a selfie
How China's richest man Li Hejun lost $15bn in an hour - and made a fortune
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Snoop Dogg on why he doesn't regret displaying misogyny towards women
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...