But, let’s be real — it’s not going to happen for a good long while. The latest, greatest example has been the notion of Barclays perhaps buying Standard Chartered, replacing, in one fell swoop, the Asian and African exposure that Barclays has spent the last several years expensively extracting itself from.
Both firms swiftly denied formal talks, though, clearly, fantasy M&A becomes more entertaining still if you happen to sit on the board of a systemically important global behemoth.
Since the wave of crisis-driven consolidation in 2007-09, regulators have been fervently opposed to big banks growing any bigger, and, more recently, revamped capital requirements to punish those that increase in size and complexity. The rewards of size have also been cut, with balance sheets balkanised, and capital and liquidity trapped in-country.
FIG M&A since then has been about spin-offs and disposals, pruning non-core exposures and sub-scale regional businesses, as well as in-country consolidation. Retail banking markets in Germany, Italy and Spain could use further consolidation, but it is likely to be driven by the national champions swallowing smaller rivals — and it’s a long way from two international firms, with chunky investment banks, opting to merge.
Barclays, in particular, has just been through a brutal round of prep for ring-fencing, with the separation of systems and reallocation of customers. Even banks without this hurdle to clear are running as fast as they can to rationalise their own tech and cut costs — the last thing any management team needs is a whole other bank to integrate.
At some point in the far future, the cycle has to turn — but, until then, thanks for playing, but it’s just a game.