Concentration in the banking sector seems to be increasingly imperative for the market and the ECB itself. Portuguese banks will certainly have to go through this process. It remains to be seen whether willingly or forcibly.
This week was rich in news about the European banking sector. In Spain, CaixaBank and Bankia have already reached an agreement for a merger. Caixabank has been integrating several smaller Iberian banks over the years, namely BPI in Portugal. And Bankia itself was born from the consolidation of 7 regional banks. Caixabank and Bankia have concluded that the only strategy not to be absorbed by external entities and to be able to compete with the giants Santander and BBVA would have to go through a union.
In Switzerland, UBS and Credit Suisse are also studying a merger, which would be one of the largest ever in the sector. Although its implementation is not certain, it clearly shows the willingness and the need for banking institutions to increase in size.
In Portugal, everything seems more difficult. If it is true that Santander and BPI are already integrated into major European banks, other institutions either increase in size or may be condemned to operational, financial and even regulatory difficulties. However, there seems to be difficulties in generating understandings, in some cases due to the reference shareholders, in others due to the composition of the asset, in others due to the weakness of the business model. Hopefully, the concentration will not be done "by force", as it happened in the cases of Banif or Popular, but it will certainly happen.