More consolidation needed on the way towards EU Banking Union
Some things drag on for so long that you almost lose sight of them. For example, the sale of the private bank Hauck Aufhäuser Lampe, which has been part of the Chinese conglomerate Fosun since 2015. For what felt like two years, speculation flared up here and there, then it was quiet again for a long time. But there is now clarity. Dutch financial group ABN Amro wants to merge the bank with Bethmann Bank, which it already owns, to become the number three in German wealth management.
ABN Amro has good reasons for the acquisition
After a long pause, things are once again happening in European bank consolidation – another example of an almost forgotten topic. For ABN Amro, which is expanding from its headquarters in Amsterdam into north-west Europe, the acquisition is a good fit in every aspect. Firstly, because the group wants to expand its wealth management business, for which it is considered one of the best houses in the Netherlands. Secondly, because the German market is still the largest and most dynamic market in Europe. And thirdly, because ABN Amro has already succeeded in integrating a long-established private bank in the form of Frankfurt's Bethmann Bank.
New owners were needed
The change of ownership also offers opportunities for the acquisition target. Concerns about the entry of Chinese investors proved to be largely unfounded – as far as is known there was no political influence. The relationship was reportedly constructive and characterised by trust. As an investor, Fosun proved to have perseverance, and was obviously aware that the small private bank in the far west understood its own business best. Nevertheless, the bank is better off in a European financial group such as ABN Amro. After all, the Ukraine war has brought geopolitical risks into focus. The fear of possible sanctions is omnipresent.
It's all about economies of scale
Consolidation in private banking will continue. Even the unwieldy name Hauck Aufhäuser Lampe reveals that economies of scale are key to surviving in a competitive market. The fact that these are being realised through a cross-border merger within Europe is encouraging. The more often staff at various European banks work with the same IT systems, the closer the completion of a single European financial market comes – on a very practical level.
