CYBG-Virgin Money deal may start run of banking tie-ups
Despite recent speculation around big-scale tie-ups - including reports that Barclays is eyeing Standard Chartered - Bob Moritz said smaller lenders were likely to star in the next string of acquisitions.
“You’re probably going to see it more so in the mid-tiers regardless of the country, even though there’s lots of rumours with some of the larger institutions - obviously particularly coming out of the UK,” he told the Press Association in St Petersburg.
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Hide Ad“The mid tiers are the ones that I think have historically been limited by what they can do with their capital because of the regulatory requirements,” Mr Moritz explained.
“I also think they’re looking for the return and they are more likely to be challenged, and therefore they probably need a little bit more scale because of the cost of doing business.”
He said technology and compliance costs will be high on banks’ radar.
Speaking to journalists earlier this week, CYBG chief executive David Duffy framed the Virgin Money deal in a similar light.
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Hide Ad“Customers want more from their banks, there are new entrants emerging all the time, the technology is changing and with all the regulatory changes, we know PSD2 and Open Banking puts a lot of challenges out there.”
He also noted the opportunity to scale up quickly, with the combined group set to double in size “on day one” with six million customers, and assets worth about £83.5bn.
“What’s important is that at our size and level we move out of the challenger bank market,” Mr Duffy said.