The European Central Bank is hoping for more cross-border bank consolidation to improve the valuation of lenders and efficiency in the sector, ECB Vice President Luis de Guindos told Portugal's Expresso in an interview.
UniCredit, Italy's second-largest bank took a 9% stake in Commerzbank (CBKG.DE) last week, catching German authorities off guard and getting a hostile reception from local management, who want to fend off any takeover attempt.
It will now be up to the ECB to decide whether to allow UniCredit (CRDI.MI) to increase its stake. De Guindos' comments may be seen as encouraging for UniCredit, even though the decision will rest with the ECB's supervision arm.
"Cross-border consolidation is important and we hope that it continues to make progress in the near term," Expresso quoted de Guindos as saying on Friday.
He said that lower European bank valuations compared to the United States were a reflection of inefficiencies in the euro area, such as national approaches and the lack of complete integration of the bloc's banking system.
"Because of this, investors regard U.S. banks as having higher intrinsic value than European banks," de Guindos added.
On monetary policy, de Guindos said that the ECB will have better information in December to make a call on a possible interest rate cut but had kept the door open on a potential October move.
"It's true to say that in December, we will have more information than in October," de Guindos said. "We will have more information and a new round of projections. But, you know, we have left the door totally open. We want to maintain our optionality."
Markets have fully priced in a cut in December but investors also see some chance of a move in October as well, given faltering growth.
