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Transcript of 0 $ EHQH 4WV IRU WKH EDQNLQJ VHFWRU FRQVROLGDWLRQ · 2020-05-10 · expansion by acquisition or...
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
Baptiste Guionnet Director
Partner
ever before. In Europe, this trend is further exacerbated by the
to the US. However, M&A in the banking sector has risen
group priorities in the coming months.
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Inward non-EU Inward EU Cross border
Outward non-EU Outward EU Domestic
100
80
60
40
20
0
38 34 33 33
15 11 7
7 76
6
9 9
5
2
23
3
4
21 21 18 19 2215
19
814
1914 10 13
5
11
12
77
8 910
7 7
2
10
4 4
56
5 1
10
16
3
22
2
2
2
3
711
4
7
1923
29
8
12
5
54
4 36 3
23
3
3
5
5
22
2 2
Trend post-crisis
out by euro area banks outside the euro area.
F
of cross-border M&A activity in Europe.
However, since the start of the crisis in 2008, M&A activity in the European
Indeed, even if other causes can be
fragmented than in the United States,
In the current economic context and given
that the number of M&A transactions rose
these transactions have, to some extent,
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
Trend post-crisis
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
RoW incoming Across states
RoW outgoing Within state
100
120
80
60
40
20
0
26
48
32
45
11
5
44
4
13
31
2
37
24
35 5
45
44
4
10
34 35
2833
4
3 35
2617
32
7
10
17
5
8
2
1
3
2
22
14 16 1928 27
15 13
45
5
16
524
2
22
3
4349
56
22
4 34
3
27
United States acquiring shares in banks in the United States.
fragmented than in the United States.
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
in recent years compared to other mature
without creating issues in the competitive
EU and the US in terms of the volume
explained by:
compared to the US
More heterogeneous markets
of each country remains a key consideration preventing certain cross-border transactions
of Brexit or announcements addressing
been overridden by attractive M&A opportunities.
Over the last few quarters, we noted
also in Europe.
• Globally:
transactions were announced, whichcorrespond to a 60 percent increase
registered in 2007.
• In Europe:
compared to the same period in 2017.
survey1 showing that:01.
02. There is now a shift from defensive toan expansionary mindset at the top
In 7 out of the 19 countries surveyed, expansion by acquisition or expansion to
expansionary strategies outnumber defensive ones in 11 of the 19 countries surveyed.
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
Between 30% and 40%China, Norway
Between 40% and 50%Sweden, Denmark, Czech Republic, Russian Federation
Between 60% and 70%Canada, USA, Netherlands, Belgium, France, Finland, Poland, Hungary
Between 50% and 60%Mexico, Brasil, Ireland, Spain, Romania, Greece
Between 70% and 80%United Kingdom, Portugal, Switzerland, Austria, Italy
Between 80% and 90%Germany
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
80
70
60
50
40
3020 40 60 80 100
More fragmented More concentrated
Cost
/inc
ome
rati
o
Market concentration index2
DE
AT
UK
ITFR
HU
PLSI BE
DKFI
CYESSE
RO
CZ
LV
BG
LT
GR
EE
MT
PT
HRNL
LUSK
IE
R2 = 0.36
order to achieve further growth.
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
to design a robust strategy to sustain growth and
organic growth prospects0102
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
, the country is indeed hosting branches or subsidiaries of many
of European banks forming part of our
management and private banking activities
of brick and mortar branches as main
the bank secrecy, the enforcement of the
costs and investments required to keep
pushed some banking groups to consider
M&A activity spiked in Luxembourg, with this trend expected to continue in the coming months.
200
250
150
100
50
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 20160
6.000
7.000
5.000
4.000
3.000
2.000
1.000
0
Nb of banks (left axis)
Average B/S per bank in €m (right axis)
Other transactions are about to occur in 2018, supporting an
for M&A activity in Luxembourg,
Banking sector but
management and servicing industry.
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
Havilland's acquisition of Banque Pasche & Banco Populare Luxembourg2015
2016
2017
2018
Julius Baer's acquisition of Commerzbank's private banking business
EFG's acquisitionof UBI and BSI Luxembourg
Legend Holding's acquisition of BIL (Banque Internationale à Luxembourg) form Precision Capital
Safra Sarasin's acquisition of Hapoalim Banque
Hauck & Aufhaeuser Privatbankiers'acquisition of Sal. Oppenheim jr & CieLuxembourg and OppenheinAsset Management Services
UBS' acquisition of Nordea'swealth management business
BGL BNP Paribas' acquisitionof ABN Amro bank'swealth management and insurance businesses
Warburg's acquisition of Nord LB
desiring to strengthen their footprint in certain markets.
2017 and Q1 2018. Others are about to occur
management and servicing industry.
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
According to a recent survey4
engage in a joint venture with a FinTech in the next two years.
20 %Technologyacquisition
16 %Expand/diversify
products or services
19 %Expanding Customer
base in existing markets
12 %Digital Strategy
9 %Talentacquisition
11 %Enter into new geographic markets
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
On recent M&A transactions, where we
showstoppers on certain transactions.
•expect to engage in a joint venture witha FinTech in the next two years
• One-third say they expect to acquire5.
Inadequate IT setups
been considered as important showstoppers on certain transactions.
5 Source: MergerMarket
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
Despite the importance of the
portion of M&A activity remains driven by size with the objective to reach an adequate cost-income ratio. According to a recent survey, recent
• Expand the customer base in core
• Enter into new geographic markets
often to re-focus on fewer core
The banks in Luxembourg might be
countdown has started; if they are not growing enough, private banks
forward.
The banks in Luxembourg might
but the countdown has started; if they are not growing enough,
going forward.
Inside magazine Issue 18 | Part 03 - From corporate strategies & people perspectives
Investing or divesting?Low interest rates in Europe together with
continue to put pressure on banks revenue
ratio of banks remains under pressure,
footprint in certain juridictions.
bring an answer to the strategic questions
• BUY strategy: Has the entity reached
Is the return on equity adequate given
• SELL strategy: Is the entity performinga core activity for the group? Is it active in
the business? Is the business undersized
the future?
divesting might be perceived as a sign of weakness. This perception together with a certain resistance to change prevents
strong market momentum, timing seems
these strategic questions.
peak in M&A activity and strong market momentum, timing seems about
answer those these strategic questions.