Bìznes Inform (May 2018)
The Main Tendencies and Details of Consolidation Processes in the International Banking Market
Abstract
Consolidation processes in the banking sector are actively developing in different regions of the world, but each region is characterized by its own peculiarities of the process behavior. Europe is characterized mainly by internal consolidated agreements. The consolidation of medium-sized banks is more common than agreements concluded among large banks. As far as international consolidation is concerned, the number of these agreements remains at a very low level. The United States is developing local and regional consolidation, which has a clear upward trend in 2018 in view of factors such as high fixed regulatory costs, low growth due to low interest rates, rapidly changing technology, and financial innovation. These factors caused a structural decrease in the profitability of banks. In the case of Asia, the region has different tendencies depending on the specific country. For example, China is dominated by consolidation transactions in the domestic market. The China’s banks are focusing on growth through diversification and the introduction of other financial services. In contrast, Japan is dominated by consolidation with international financial institutions against a background of slow economic growth and declining population in the domestic market. The main areas of Japan’s consolidation are the United States and the ASEAN countries.
