BankEcon Intelligence and Information on European Banking

Transcription

1 BankEcon Intelligence and Information on European Banking Pocket Guide to European Banking April

2 Copyright BankEcon Limited The publication may be copied and distributed to others without permission and without charge provided the identity of the publisher is not removed. This publication is available in PDF format on the BankEcon website Care has been taken in compiling this publication. However, the publisher cannot accept responsibility for any errors or omissions, no matter how caused. Because the publication is designed to be no more than a basic guide, detailed notes have not always been included. Data used in the Guide may not have been prepared on the same basis. For example, net profit and return on equity figures may be affected by differences in accounting standards, the treatment of non-recurring and non-cash items, etc. Care should therefore be taken in using the data. If you have any questions about the data (or more generally comments and suggestions about the Guide), please pocketguide@bankecon.com. BankEcon Limited. Registered in England and Wales, Number Registered Office: Unit 2, Great Eastern Street, London EC2A 3EP.

3 About BankEcon BankEcon is a new publishing and research venture analysing trends and developments in European banking. Later this year, BankEcon is launching its new monthly publication European Banking Monitor. The publication will offer a definitive analysis of developments in banking across Europe. Register at the BankEcon website - to receive details of the new publication, including the offer of a trial subscription. BankEcon also publishes a range of high quality research briefings and reports. Details of research publications are available on the BankEcon website. Again, register via the website for further information. Pocket Guide Overview The BankEcon Pocket Guide is designed to be a handy reference guide to European banking. It is divided into two sections. 1. The first section offers a brief pan-european overview. 2. The second section contains brief profiles of each of the major European markets. There is no charge for the Pocket Guide and you are welcome to forward it to colleagues. It will be updated later in the spring to include 2001 statistics. Register via to receive a copy of the update. The Pocket Guide focuses on western Europe. A Pocket Guide covering central & eastern Europe is planned. Again, register via the website to receive details. Clearly, the Pocket Guide is not designed to be comprehensive. It offers no more than a basic guide to the main features of the European market. For those seeking a fully comprehensive guide, BankEcon will also be launching its European Banking Yearbook later in the year. Again, register via to receive details of the Yearbook. BankEcon Intelligence and Information on European Banking 1

4 1. Pan-European Overview European Market Key Characteristics Major Banks by Country (Map) Largest Banks by Total Assets Consolidation Characteristics & Obstacles Recent Mergers & Acquisitions Cross-Border Ownership, Alliances and Shareholdings BankEcon Intelligence and Information on European Banking 2

5 European Market Key Characteristics Integration Growing integration is evident at the level of capital markets and wholesale banking. However, despite the European single market and euro, retail banking remains largely nationally-based. According to the ECB, branches from banks based in other EU markets account for less than 5% of local banking assets on average. Though cross-border banks have started to develop (notably Dexia in Belgium/France, Fortis in Benelux and Nordea in the Nordic region), bank mergers and acquisitions have to date largely been restricted to national markets (see below). The European Commission has issued a Financial Services Action Plan to remove the remaining obstacles to cross-border operation. Its objective is an integrated European market for financial services by Market Structures Structural differences between banking markets across Europe continue to be important. There remain significant variations in characteristics such as: ownership structures, the extent of privatisation and demutualisation, market concentration and the presence of foreign banks. BankEcon Intelligence and Information on European Banking 3

6 Mutual, co-operative and state-owned banks continue to be significant in many markets. For example, many of the major French banks are mutually owned. Savings and cooperative banks dominate domestic banking in Germany. In Spain, the savings banks ( Las Cajas de Ahorros ) account for about half of the domestic financial system. The largest banks in markets such as Greece (National Bank of Greece), Norway (DnB) and Portugal (CGD) remain state controlled or with the state as a significant shareholder. Performance With greater capital market pressure, there is a growing emphasis on financial performance. Most banks now have return on equity (RoE) targets. The increased emphasis on financial performance is evident in mutual and co-operative institutions as well as listed banks. Non-interest income is increasing in importance. According to the ECB, non-interest income from fees and commissions accounted for over 50% of euro-zone banks total income by This compares with less than 30% in Technology Many European banks have emerged as leaders in the application of new technologies. However, internet-only banks have largely failed to establish themselves. The Nordic region in particular has emerged as a global pioneer in the application of new technologies. Merita of Finland (now Nordea) introduced PC banking in 1984 and internet banking in By end 2001, Nordea had 2.7 million e-banking customers. OKO Bank of Finland was the second bank globally to launch an internet banking service and the first to launch a GSM mobile banking service. BankEcon Intelligence and Information on European Banking 4

7 Major Banks by Country UK: HSBC Lloyds TSB RBS (NatWest) Barclays HBOS Abbey National IRELAND: AIB Bank of Ireland FRANCE: Credit Agricole BNP Paribas Societe Generale Caisse d'epargne Caisse des Depots Banques Populaires Credit Lyonnais Credit Mutuel CIC CCF (HSBC) PORTUGAL: Caixa Geral de Depositos Banco Comercial Portugues Banco Espirito Santo SPAIN: BBVA SCH La Caixa Caja Madrid NORWAY: DnB Union Bank of Norway Nordea (Christiania) DENMARK: Danske Nordea (Unidanmark) ITALY: IntesaBci UniCredito San Paolo IMI MPS Group Banca di Roma SWEDEN: SEB Swedbank Handelsbanken Nordea (Nordbanken) FINLAND: Nordea (Merita) OKO Bank Sampo (Leonia) NETHERLANDS: ABN AMRO ING (Postbank) Rabobank BELGIUM: Fortis KBC Dexia SWITZERLAND: Credit Suisse UBS LUXEMBOURG: Deutsche Bank Luxembourg Dexia Banque Int'l a Lux. Banque Generale (Fortis) Kredietbank Luxembourg GERMANY: Deutsche HVB Dresdner (Allianz) Commerzbank West LB DZ Bank Bayerische Landesbank AUSTRIA: Bank Austria (HVB) Erste GREECE: NBG Alpha EFG Eurobank Ergasias BankEcon Intelligence and Information on European Banking 5

8 Largest Banks by Total Assets Bank Home Country Total Assets ( bn) Exchange Rates (Source: ECB) Deutsche Bank Germany 929 HSBC UK 723 End Dec rate of / HVB Group Germany 717 UBS Switzerland 714 End Dec rate of CHF / BNP Paribas France 693 ING Netherlands 650 Credit Suisse Switzerland 648 End Dec rate of CHF / ABN AMRO Netherlands 543 Crédit Agricole France 536 RBS UK 513 End Dec rate of / Barclays UK 507 End Dec rate of / Dresdner Bank Germany 484 Commerzbank Germany 460 Société Générale France 456 Fortis Belgium/Netherlands 438 HBOS UK 426 End Dec rate of / Westdeutsche Landesbank Germany 400 DZ Bank Germany 374 Lloyds TSB UK 351 End Dec rate of / SCH Spain 349 BankEcon Intelligence and Information on European Banking 6

9 Consolidation Characteristics & Obstacles Characteristics To date, banking mergers and acquisitions have mainly taken place at a national level. Cross-border activity has largely been restricted to: Sub-regional consolidation (eg Nordea in the Nordic region, Fortis in Benelux). Alliances and cross-shareholdings (eg SCH, Commerzbank, Société Générale, San Paolo IMI, RBS). Direct investment (eg SCH in Germany, Deutsche Bank in Italy and Spain, ING in France, Italy and Spain). Obstacles State ownership and control (eg Landesbanken in Germany) Treatment of banks in some markets as national strategic assets Mutual and co-operative structures (eg Sparkassen in Germany, Cajas de ahorro (savings banks) in Spain) Competition authority concerns, particularly at a national level (eg Lloyds TSB s acquisition of Abbey National blocked in UK, merger of SEB/Swedbank in Sweden blocked by the European Commission) At a European level, tax, accounting, linguistic and cultural differences Also at a European level, national banking infrastructures (eg payment systems) BankEcon Intelligence and Information on European Banking 7

10 Date Country Merger/Acquisition Major Mergers & Acquisitions March 2002 Italy Banca di Roma agrees merger with Bipop-Carire, troubled medium-sized bank December 2001 Ireland / N lands Rabobank agrees to purchase Ireland s state-owned ACCBank December 2001 Italy San Paolo-IMI agrees merger with Cardine, a large regional bank November 2001 Greece National Bank of Greece and Alpha Bank, Greece s two largest banks, announce merger. However, plans abandoned in January 2002 after failure to agree management structure. July 2001 Sweden Nordea (Nordbanken) announces acquisition of Postgirot Bank from the Swedish Post June 2001 France Caisse des Dépôts and Caisse d Epargne pool many activities in new joint venture company - EULIA June 2001 Germany Co-operative central banks GZ-Bank and DG BANK agree to merge, forming DZ BANK April 2001 Germany Allianz, Germany s largest insurance group, announces takeover of Dresdner Bank April 2001 UK Halifax and Bank of Scotland announce merger, leading to formation of HBOS. March 2001 Belgium Acquisition of Artesia by Dexia announced February 2001 Sweden SEB and FöreningsSparbanken (Swedbank) announce merger plans. However, plans withdrawn in September 2001 following concessions required by the European Commission. October 2000 Denmark Acquisition of RealDanmark by Danske announced October 2000 Norway (Nordic) MeritaNordbanken (Nordea) wins government auction for Christiania Bank August 2000 UK Barclays announces acquisition of Woolwich BankEcon Intelligence and Information on European Banking 8

11 Date Country Merger/Acquisition Major Mergers & Acquisitions July 2000 Austria / Germany Acquisition of Bank Austria by HypoVereinsbank announced April 2000 France / UK Acquisition of Crédit Commercial de France by HSBC announced March 2000 Denmark (Nordic) Acquisition of Unidanmark by MeritaNordbanken (Nordea) announced February 2000 UK Royal Bank of Scotland (RBS) beats Bank of Scotland to acquire NatWest January 2000 Portugal BES and BPI announce merger plans. However, merger plans collapse in March November 1999 Portugal Plan for break-up of Champalimaud group agreed. Banco Pinto e Sotto Mayor to BCP. Banco Totta & Açores and Crédito Predial Português to SCH. Insurance company Mundial Confiança to CGD. October 1999 Finland Merger of Leonia, Finland s third largest bank, and Sampo, the leading Finnish insurer, announced October 1999 Spain Merger of Banco Bilbao Vizcaya (BBV) and Argentaria to create BBVA announced September 1999 Belgium / France Dexia announces a full merger with Crédit Local de France August1999 France BNP wins control of Paribas June 1999 Italy Acquisition of Banca Commerciale Italiana (BCI) by Banca Intesa announced March 1999 Norway DnB announces acquisition of Postbanken January 1999 Spain Merger of Banco Santander and Banco Central Hispano (BCH) to create SCH announced Note: Mergers and acquisitions may take several months from announcement to completion (or not) and then integration. A precise merger date is therefore not always possible. In most cases, the date given above is the date of the merger announcement. BankEcon Intelligence and Information on European Banking 9

12 Examples of Cross-Border Banks, Alliances and Shareholdings in Europe Bank ABN AMRO BBVA CDC Crédit Agricole Deutsche Bank Dexia Fortis Handelsbanken HSBC HVB Details Largest Dutch banking group. Has a 10% stake in Banca di Roma and a stake in Banca Antoniana Popolare Veneta (BAPV). Bid unsuccessfully for CIC of France and Générale Bank of Belgium Spain s second largest banking group. A core shareholder in Crédit Lyonnais of France. Bought a 10% stake in the privatisation of Italy s Banca Nazionale del Lavoro. Major French financial group. Partnership with Italy s San Paolo IMI. Partnership in development with Bayerische Landesbank (through EULIA joint venture company with Caisse d Epargne). France s largest banking group. Largest shareholder in IntesaBci, Italy s largest bank. Owner of 22.2% stake in Banco Espírito Santo of Portugal. Significant shareholder in Commercial Bank of Greece. Germany s largest banking group. Bought Crédit Lyonnais Belgium in December Holds a 10% stake in Greece s EFG Eurobank Ergasias. Branch networks in Belgium, France, Italy and Spain, plus Poland. Franco-Belgian banking group formed from the merger in 1996 of Crédit Communal de Belgique and Crédit Local de France. Major lender to public authorities. Owns 20% of Société Générale subsidiary Crédit du Nord. Pan-Benelux bank incorporating Générale de Banque and ASLK-CGER in Belgium, VSB in the Netherlands and Banque Générale du Luxembourg. One of the four major Swedish banks. Branch networks in all four of the main Nordic markets. Acquired Midtbank of Denmark in UK-based global banking group. Acquisition of CCF was first foreign acquisition of a major French bank. Germany s second largest banking group. In 2000, bought Bank Austria, largest Austrian banking group. Both HVB and Bank Austria are major investors in central & eastern Europe. BankEcon Intelligence and Information on European Banking 10

13 Examples of Cross-Border Banks, Alliances and Shareholdings in Europe Bank ING Nordea Rabobank RBS SCH Details One of three largest Dutch banking groups. International banking interests include Banque Bruxelles Lambert in Belgium and BHF and DiBa in Germany. Has direct banking operations under the ING Direct brand in France, Italy and Spain. Pan-Nordic bank formed from the mergers of Merita (Finland), Nordbanken (Sweden), Unidanmark (Denmark) and Christiania (Norway). Co-operatively owned, and one of three largest Dutch banking groups. Agreed to purchase ACCBank in Ireland in December Took a 28% stake in Bank Sarasin of Switzerland in early One of largest UK banking groups. Partnership with Spain s SCH. Spain s largest banking group. Cross-shareholdings with Société Générale in France, Commerzbank in Germany, San Paolo IMI in Italy and RBS in UK (though SG holding significantly reduced during 2001). Through acquisition of Banco Totta & Açores and Crédito Predial Português following break-up of the Champalimaud Group, SCH is now one of the five largest banks in Portugal. Strong presence in Germany (CC-Bank and Direkt Bank subsidiaries). Swedbank One of the four major Swedish banks. Owns 25% of SpareBank 1 Gruppen in Norway and 24.4% of Aktia Sparbank in Finland. Acquired FIH Bank in Denmark in Leading bank in the Baltics. Notes: This table concentrates on mergers, alliances and shareholdings within western Europe. Several of the leading western European banks have a significant presence in the markets of central & eastern Europe. BankEcon Intelligence and Information on European Banking 11

14 2. Country Profiles Austria Greece Portugal Belgium Ireland Spain Denmark Italy Sweden Finland Luxembourg Switzerland France Netherlands United Kingdom Germany Norway BankEcon Intelligence and Information on European Banking 12

15 Austria Main Characteristics Austria has large savings and co-operative bank sectors. Together, the savings and co-operative banks accounted for more than 60% of Austrian banks total assets at end Austria s largest banks in order of size are: Bank Austria, Austria s largest private bank now owned by HVB, Germany s second largest bank. Erste Bank, Austria s oldest savings bank and the central institution of the Austrian savings bank sector. BAWAG, part-owned by Austria s trade unions (53.5%) and Germany s Bayerische Landesbank (46.2%). Raiffeisen Zentralbank (RZB), central bank of Austria s 655 raiffeisen (co-operative) banks. HVB is merging Bank Austria and its Creditanstalt subsidiary (acquired by Bank Austria in 1997). The merger will create Bank Austria Creditanstalt AG, operating with a single brand and branch network in Austria. During 2000, the saving banks sector and Erste, its lead bank, have developed their joint marketing. They now use a single visual identity and unified product range. Austria s leading banks have significant operations in eastern Europe and Russia. Recent Developments May 2001: Full merger of Bank Austria and Creditanstalt announced. August 2000: BAWAG buys Austrian Postal Savings Bank (PSK), Austria s fifth largest bank. July 2000: HypoVereinsbank, Germany s 2 nd largest bank, announces acquisition of Bank Austria. 2000: Joint marketing of Erste and the savings banks developed. September 1999: European Commission launches price-fixing investigation of Austrian banks. 1997: Bank Austria acquires Creditanstalt and Erste Bank acquires Girocredit. BankEcon Intelligence and Information on European Banking 13

16 Austrian Banks Key Statistics Pre-tax Profits ( m) Domestic Assets ( bn) Foreign Assets ( bn) Total Assets ( bn) Joint stock and private banks Savings banks State mortgage banks Raiffeisen credit co-operatives Volksbank credit co-operatives Building and loan associations Special purpose banks All sectors 2, Note: Pre-tax profits are expected profit or loss on ordinary activities Source: OeNB (Austrian Central Bank) Largest Austrian Banks Key Figures 2000 ( millions) Net Profits Year End Assets Risk Asset Ratio Return on Equity Bank Austria , % 13.1% Erste Bank , % 12.3% Notes: 1. Figures are consolidated group figures. 2. Bank Austria: Acquired by HypoVereinsbank in August Erste Bank: Figures include Ceska sporitelna for five months. Source: Company Earnings Statements and Annual Reports. BankEcon Intelligence and Information on European Banking 14

17 Belgium Main Characteristics According to the Belgian central bank, the Belgian banking market is one of the most concentrated in the EU. The five largest banks had a market share (of customer deposits) of over 80% at end The Belgian banking market is dominated by Fortis, KBC and Dexia. Fortis is a Belgo-Dutch group while Dexia is a Belgo-French group. Both Fortis and KBC are major bancassurance groups, with significant insurance activities. Bancassurance is of growing importance in the Belgian market. Banking groups accounted for 50% of life insurance business in 1999, and over 75% of new contracts concluded in Fortis is one of Europe s largest financial institutions. It acquired Générale de Banque, Belgium s largest bank, at the end of This followed its acquisition of ASLK-CGER, Belgium s fourth largest bank. Dexia grew out of an alliance between Crédit Communal de Belgique, owned by Belgium s local authorities, and Crédit Local de France. In September 1999, Dexia announced that the alliance was being transformed into a full-scale merger with a single holding company incorporated in Belgium. KBC is the dominant financial group in Flanders, Belgium s Dutchspeaking northern half. It is also one of the most active western banks in central and eastern Europe. As of mid-2001, KBC controlled CSOB in the Czech Republic, K&H in Hungary and Kredyt Bank in Poland. Recent Developments March 2001: Dexia announces plans to by Artesia in an all-share deal. September 1999: Dexia announces a full merger with Crédit Local de France, with a single holding company incorporated in Belgium (Crédit Communal was renamed Dexia Banque in May 2000). December 1998: Deutsche Bank agrees to buy Crédit Lyonnais Belgium. July 1998: Fortis completes merger with Générale de Banque, Belgium s largest bank. Summer 1998: KBC formed from the merger of Kredietbank, Belgium s second largest bank, Cera, the cooperative bank, and ABB, an insurer. BankEcon Intelligence and Information on European Banking 15

18 Largest Belgian Banks Key Figures 2000 ( millions) Net Profits Year End Assets Risk Asset Ratio Return on Equity Fortis 2, , % 20.0% KBC 1, ,658 16% 23.3% Dexia 1, , % 17.7% 1. Notes: 2. Figures are consolidated group figures. 3. Fortis: Net profit from banking was 1,506 million. 4. KBC: Return on equity excludes capital gain on CCF sale. Banking contribution to consolidated net profit was 1,520.9 million. 5. Dexia: Return on equity excludes amortization of goodwill relating to the public exchange offer on shares of Dexia BIL and the acquisition of FSA and Labouchere. Source: Company Earnings Statements and Annual Reports. BankEcon Intelligence and Information on European Banking 16

19 Denmark Main Characteristics Though there were more than 180 Danish commercial and savings banks at end 2000, the market is highly concentrated. The sector has historically been dominated by three institutions - Den Danske Bank, Unidanmark (Unibank) and Bikuben Girobank (BG Bank). Following Danske s acquisition of BG Bank and Nordea s acquisition of Unidanmark, the two banks now account for some 75% of the domestic banking market. Danske Bank has expanded across the Nordic region in recent years, buying Sweden s Ostgöta Enskilda Bank in March 1997 and Fokus Bank, Norway s fifth largest, in December Home purchasing is financed primarily through mortgage banks. As a result, the balance sheet assets of mortgage banks are almost as large as those of commercial and savings banks. As in other Nordic markets, internet banking has grown rapidly in Denmark. Recent Developments October 2000: Den Danske Bank, largest Danish bank, announces the acquisition of RealDanmark, owner of BG Bank, Denmark s third largest bank (and Realkredit Danmark, the country s second largest mortgage lender). March 2000: Finnish/Swedish bank Nordea (then MeritaNordbanken) announces the 4.78 billion acquisition of Unidanmark, second largest Danish bank. October 1999: FöreningsSparbanken of Sweden acquires the Danish business bank FIH, the first substantial foreign takeover of a Danish bank. March 1999: Unidanmark merges with Tryg-Baltica, Denmark s leading non-life insurer. BankEcon Intelligence and Information on European Banking 17

20 Danish Banking Key Statistics DKK billion Deposits Loans Total Assets Danske Bank Unibank BG Bank Jyske Bank Sydbank Total Commercial & Savings Banks ,745.4 Total Mortgage Banks na na 1,378 Notes: 1. Figures based on each institution s banking business, not the entire financial group. 2. DKK / = 7.46 at end 2000 (Source: ECB). Source: Danish Bankers Association / Danish Financial Supervisory Authority BankEcon Intelligence and Information on European Banking 18

21 Finland Main Characteristics Finland has three main commercial banks along with large numbers of smaller co-operative and savings banks. Nordea (Merita) dominates the Finnish market, followed by OKO Bank group and Sampo Bank (formerly Leonia). Together, the three largest groups accounted for over 90% of Finnish banks pre-tax profits and total assets in Other Nordic banks such as Svenska Handelsbanken, SEB and Danske Bank are also active in Finland. With very high levels of personal computer and mobile phone ownership, Finland is a leader in Internet banking. OKO Bank was the second bank globally to launch an internet banking service and the first to launch a GSM mobile banking service. Nordea (Merita) has extended its Solo branded Internet service across the Nordic region. By end 2001, more than 2.7 million customers had subscribed to Nordea s internet banking services. Of these, more than 1.1 million were in Finland. Recent Developments December 2000: The enlarged Sampo Group announces its acquisition of Mandatum Bank, the specialist Finnish investment bank. October 1999: Merger plans announced between state-owned Leonia, Finland s third largest bank, and Sampo, the leading Finnish insurer. Leonia became Sampo Bank plc in Spring The Finnish Government retains a 40% stake in the enlarged bancassurance group. October 1997: Merita Bank, Finland s largest bank, announces merger with Sweden s Nordbanken to form MeritaNordbanken (later to become Nordea). BankEcon Intelligence and Information on European Banking 19

22 Finnish Banking Key Statistics Staff Branches Pre-tax Profits ( m) Assets ( bn) Merita Bank Group 12, OKO Bank Group 8, Leonia Bank Group 4, Savings banks 1, Local co-operative banks Bank of Aland Group Mandatum Bank Group Gyllenberg Private Bank 54 1 See notes See notes Domestic Banks Total 28,647 1,523 2, Foreign Banks na 9.5 Total 29,496 1,550 na Notes: 1. Leonia Bank Group figures cover banking and investment services. Sampo Group since April Gyllenberg Private Bank belongs to SEB Group. 3. Mandatum Bank acquired by Sampo-Leonia. 4. From December 2001, all banks in the Nordea Group have adopted the Nordea name. Source: Finnish Bankers Association BankEcon Intelligence and Information on European Banking 20

23 France Main Characteristics The French banking market has a complex structure. Alongside the listed commercial banks, mutual and co-operative institutions are particularly important. Several of the main banking groups have a regional structure. There is a legacy of state ownership along with significant cross-shareholdings between banks. The main French listed banks are: BNP Paribas, Société Générale and, following its privatisation, Crédit Lyonnais. The main French mutual and co-operative banks are: Crédit Agricole, Groupe Banques Populaires, Groupe Caisse d Epargne and Crédit Mutuel. A number of the banking groups have hybrid structures for example combining mutual and co-operative structures a listed entity: 20% of the equity of Crédit Agricole SA, central body of the Crédit Agricole Group, was floated in December Following its takeover of Natexis in 1998, the Banques Populaires Group combines a listed financial institution (Natexis Banques Populaires) with a co-operative regional bank network. Following Crédit Mutuel s acquisition of a majority stake in 1998, The CIC group is owned by Crédit Mutuel (69.07% stake), the GAN group (23%), the general public (4.75% free float) and employees (3.18%, including bonus shares to be allocated). The market has seen consolidation in recent years, with BNP acquiring Paribas and Crédit Mutuel taking a majority stake in CIC Group. There is speculation about the long-term future of Crédit Lyonnais. Crédit Agricole holds a 10% stake and the government is likely at some point to sell its remaining 9.6% stake. Recent Developments December 2001: Crédit Agricole launches an initial public offering on the Paris Bourse. June 2001: The Caisses d Epargne and the state-owned Caisse des Dépôts Group (CDC) announce plans to combine a series of assets, creating France s third largest bank (subsequently named EULIA). April 2000: Acquisition of Crédit Commercial de France (CCF) by HSBC of the UK announced, the first major foreign acquisition of a French banking group. 1999: Takeover battle between Banque Nationale de Paris, Société Générale and Paribas, the investment bank. In the event, BNP succeeded in acquiring Paribas though it failed to acquire Société Générale. BankEcon Intelligence and Information on European Banking 21

24 Largest French Banks Key Figures 2000 ( billion) Net Profits Year End Assets Risk Asset Ratio Return on Equity BNP Paribas % 20.9% Crédit Agricole % 12.0% Société Générale % 22.4% Crédit Mutuel-CIC % 12.0% Caisse des Dépôts Group % Caisse d Epargne Group % Groupe Banques Populaires % 14.1% Crédit Lyonnais % 10.3% CCF % 16.7% Notes: 1. Figures are consolidated group figures. 2. Crédit Mutuel owns 69% of CIC. The figures are for Crédit Mutuel and CIC combined. 3. Caisse des Dépôts Group (CDC) owns 35% of Caisse Nationale Des Caisses D Eparge, the national body of the Caisse D Epargne Group. The CDC and Caisse D Epargne Groups announced in 2001 the merger of various banking interests to form EULIA, a joint venture finance company. 4. Crédit Agricole owns 10% of Crédit Lyonnais. Source: Company Earnings Statements and Annual Reports. BankEcon Intelligence and Information on European Banking 22

25 Germany Main Characteristics The German banking sector, particularly in retail banking, is considered overbanked, with much of the domestic market supplied by small savings and co-operative institutions. The sector comprises three main groups: The commercial banks: the so called big three (Deutsche, Dresdner, Commerzbank), the regional banks and other commercial banks (including HypoVereinsbank, now the second largest private bank, and Berliner Bank), the private bankers, the Postbank and branches of foreign banks. The public sector commercial banks: the 600 or so savings banks (Sparkassen) and the 13 central giro institutions (Girozentralen or Landesbanken) such as West LB and Bayerische Landesbank which serve as central banks for the savings banks in their respective regions. The co-operative banks: the more than 2,500 credit co-operatives operating as Volksbanken in urban areas and Raiffeisenbanken in rural areas. Though they differ in legal form, size and business structure, the majority of banks in the three categories conduct most types of banking business. In addition are various categories of specialist banks, including the private mortgage banks (private hypothekenbanken) and public mortgage banks. Faced with unprofitable domestic retail banking operations, the large commercial banks (particularly Deutsche) have focused on international expansion in corporate & investment banking and asset management. Recent Developments February 2002: German government and European Commission agree plan to dismantle Landesbanken state guarantees from June 2001: DG Bank, the largest co-operative bank, agrees merger plans with GZ Bank, a smaller regional co-operative bank, forming DZ Bank, Germany s sixth largest. May 2001: Leading German insurer Allianz announces the acquisition of Dresdner, creating the first German bancassurance giant. 2000: Unsuccessful merger discussions between Deutsche and Dresdner and then between Dresdner and Commerzbank. BankEcon Intelligence and Information on European Banking 23

26 Largest German Banks Billions Total Assets Deutsche Bank HVB Group Dresdner Bank Commerzbank Westdeutsche Landesbank DZ Bank Bayerische Landesbank Landesbank Baden-Württemberg Notes: 1. Figures are consolidated group figures. 2. DZ BANK was formed following the merger between the two cooperative central banks GZ-Bank and DG BANK on 1st September End 2000 figure is a pro-forma figure. Source: Company Earnings Statements & Annual Reports. Banks in Germany Total Assets by Category 2000 Billions Total Assets Commercial Banks 1,704.4 Land Banks (Landesbanken) 1,222.7 Savings Banks (Sparkassen) Regional Institutions of Credit Cooperatives Credit Co-operatives Mortgage Banks Building & Loan Associations Banks with Special Functions Total 6,148.3 Note: Foreign Banks Notes: 1. For German banks with international activities, figures only cover assets in Germany. 2. Within commercial banks category, total assets of Großbanken Deutsche, HVB, Dresdner and Commerzbank was 969.8bn. Source: Deutsche Bundesbank BankEcon Intelligence and Information on European Banking 24

27 Greece Main Characteristics After a wave of mergers and acquisitions, six banks now dominate the Greek banking market. National Bank of Greece (NBG) is the country s largest bank. State-controlled organisations hold just over a third of NBG s equity. Alpha Bank is the largest private bank. In late 2001, NBG and Alpha announced plans for a merger. However, the merger plans collapsed in January 2002 after failure to agree a senior management structure for the new group. The other main banks are Commercial Bank of Greece, Agricultural Bank of Greece (both statecontrolled), EFG Eurobank Ergasias and Piraeus Bank. Banks from elsewhere in Europe have established a presence in the Greek market. EFG Eurobank Ergasias is ultimately part of the Geneva-based EFG Bank European Financial Group controlled by the Latsis family. Deutsche Bank holds a 10% stake. Crédit Agricole holds a stake in Commercial Bank of Greece. Piraeus has a strategic alliance agreement with ING of the Netherlands. Foreign banks present in Greece include Citibank and BCP. Recent Developments January 2002: Piraeus finalises a strategic alliance agreement with ING of the Netherlands. January 2002: NBG and Alpha merger plans collapse after failure to agree a senior management structure for the new group. November 2001: NBG and Alpha announces plans for a merger. June 2000: Purchase of a 6.7% stake in statecontrolled Commercial Bank of Greece by France s Credit Agricole announced as part of the Greek Government s partial privatisation programme. August 1999: EFG Eurobank wins takeover battle for Ergobank, becoming third largest Greek bank. April 1999: Alpha wins battle for a 51% stake in Ionian Bank offered for sale by the government. 1998: EFG Eurobank acquires Bank of Athens and Cretabank. BankEcon Intelligence and Information on European Banking 25

28 Millions Total Assets Greek Banking Key Statistics Shareholders Funds Customer Loans Customer Deposits National Bank of Greece 43,308 2,582 14,118 33,058 Alpha Bank 28,217 1,957 11,722 15,421 Commercial Bank of Greece 15,650 1,848 6,600 8,432 Agricultural Bank of Greece 15,583 1,797 8,933 10,780 EFG Eurobank Ergasias 15,393 1,753 7,809 8,816 Piraeus Bank 10,818 1,095 4,435 5,883 Other Banks 6, ,514 3,928 Greek Banks Total 135,194 11,718 57,132 86,317 Total - Specialised Credit Institutions Note: Data as of 31/12/2000. Source: Hellenic Bank Association 8,969 2,418 4,656 3,589 BankEcon Intelligence and Information on European Banking 26

29 Ireland Main Characteristics The Irish market has become more sophisticated and diversified, with over 80 banks and credit institutions authorised to conduct business by end The majority of institutions authorised to conduct business are foreign banks, or majority-owned subsidiaries of foreign banks. The development of Dublin s International Financial Services Centre has helped internationalisation of the Irish market. The ISFC has become a major fund and treasury management centre. However, the domestic retail market continues to be dominated by the two main Irish banking groups - Allied Irish Bank and Bank of Ireland. Other banks operating in the Irish retail market include: ACCBank, the former state-owned bank acquired in early 2002 by Rabobank National Irish Bank, part of National Australia Group s European operations permanent tsb, formed by the merger of TSB Bank with Irish Permanent (the retail bank of Irish Life & Permanent plc, the life insurance and residential mortgages group) Ulster Bank, the RBS subsidiary which operates in both the Irish Republic and Northern Ireland Both Allied Irish Bank and Bank of Ireland have expanded beyond Ireland. AIB has significant operations in the UK, US and Poland. Bank of Ireland owns Bristol & West, a major residential mortgage provider in the UK. Disclosure in early 2002 of the news that AIB s US subsidiary Allfirst had lost $691m in foreign exchange trading has significantly damaged the bank. BankEcon Intelligence and Information on European Banking 27

30 Recent Developments Key Figures 2000 ( millions) Largest Irish Banks Net Profits Year End Assets Risk Asset Ratio Return on Equity AIB , % 21.6% Bank of Ireland , % 24.6% Notes: 1. Figures are consolidated group figures. 2. AIB return on equity adjusted to exclude the impact of the deposit interest retention tax settlement. 3. Bank of Ireland figures are for year to March Source: Company Earnings Statements and Annual Reports. Early 2002: $691 million foreign exchange trading loss disclosed by AIB Group at its Allfirst subsidiary in the United States. December 2001: Rabobank, the Dutch co-operative banking group agrees to purchase state-owned ACCBank for 165 million. April 2001: Irish Life & Permanent plc, the life insurance and residential mortgages group, completes acquisition of TSB Bank, subsequently merging TSB with its retail bank Irish Permanent to form permanent tsb. BankEcon Intelligence and Information on European Banking 28

31 Italy Main Characteristics The Italian market has many small banks, with significant mutual and co-operative banking sectors. Though the number of banks remains large, the sector has experienced significant consolidation during recent years. The number of banks fell from 1,176 in 1990 to 841 at the end of 2000 according to the Italian central bank. IntesaBci, Unicredito and San Paolo IMI have emerged as Italy s three largest banking groups. According to the central bank, the share of total assets controlled by the five largest banking groups had reached 54% by 2000, with the ten largest groups controlling 67% of total assets. Italian banks have diversified into fee-earning services. According to the central bank, some 50% of the gross income of the leading banks was generated by commissions and activities other than lending and deposit-taking. This compares with less than 30% in the mid-1990s. As part of this diversification, cross-shareholdings between banks and insurance companies have grown. According to the central bank, banks share of new life insurance premiums was above 70% in Recent Developments March 2002: Banca di Roma agrees merger with Bipop- Carire, troubled medium-sized bank December 2001: San Paolo-IMI agrees merger with Cardine, a large regional bank November 2001: Banca Popolare di Verona and Banca Popolare di Novara agree to merge, creating Italy s sixth largest bank by branches January 2000: Merger announced between Banca Popolare di Verona and Banca Popolare di Bergamo Autumn 1999: Agreement between San Paolo IMI and Generali to acquire INA, with San Paolo IMI subsequently acquiring INA s controlling stake in Banco di Napoli October 1999: Banca Intesa acquires BCI after UniCredito bid blocked by the Italian central bank Spring 1999: Takeover of Banca di Roma by San Paolo IMI blocked by the Italian central bank 1998: UniCredito Italiano formed through merger of Credito Italiano and three north Italian regional banks 1998: Merger of Istituto San Paolo and IMI 1997: Banca Intesa created through merger of Banco Ambrosiano Veneto and Cariplo savings bank BankEcon Intelligence and Information on European Banking 29

32 Largest Italian Banks Billions Total Assets IntesaBci Unicredito San Paolo IMI MPS Group Banca di Roma 93.3 BNL 91.5 Notes: 1. MPS Group is Banca Monte Dei Paschi Di Siena Group. 2. BNL is Banca Nazionale del Lavaro Source: Company Earnings Statements & Annual Reports. End 2000 Italian Banking Market Structure Number of Banks Number of Branches Italy Abroad Limited company banks , Co-operative banks (banche popolari) Mutual banks (banche di credito coperativo) Branches of foreign banks 44 4, , Total , Note: Limited company banks includes banks accepting medium and long-term funds and central credit and refinancing institutions. Source: Banca d Italia BankEcon Intelligence and Information on European Banking 30

33 Luxembourg Main Characteristics Luxembourg is a major financial centre. It is a European hub for investment funds. According to the central bank, there were 1,785 investment funds at end Many Eurobond issues are quoted on the Luxembourg Stock Exchange. The financial sector accounts for 30% of GDP. Financial sector employment accounted for 10% of overall employment at end 2000 according to the central bank. Given its international markets, a large number of banks have operations in Luxembourg. The number of credit institutions in Luxembourg was 202 at the end of 2000, according to the central bank. The aggregate balance sheet of Luxembourg s banking sector was billion at end 2000 according to the central bank. Most of the banks operating in Luxembourg are subsidiaries or branches of international banking groups (see accompanying table). Germany accounts for the largest proportion. Though most banks focus on Luxembourg s international markets, some such as Banque Générale du Luxembourg (owned by Fortis) are also active in the domestic market. The Luxembourg market is one of the least concentrated in Europe. According to the central bank, as of September 2000 the five largest banks held only 26% of the domestic banking sector s total assets. BankEcon Intelligence and Information on European Banking 31

34 Largest Luxembourg Banks Key Statistics Millions Total Assets Equity Net Profit Employees Deutsche Bank Luxembourg 49,522 1, ,891 Dexia Banque International à Luxembourg 42,823 1, ,087 Banque Générale du Luxembourg 35,523 1, ,076 Kredietbank Luxembourg 31,830 1, ,705 Dresdner Bank Luxembourg 19,260 1, WestLB International 16, Société Générale Bank & Trust 11, Landesbank Schleswig-Holstein International 7, Deutsche Girozentrale International 6, Europäische Hypothekenbank 5, Note: Figures are consolidated group figures. Source: ABBL (Luxembourg Bankers Association) BankEcon Intelligence and Information on European Banking 32

35 Netherlands Main Characteristics The Netherlands has a sophisticated and developed banking market. As in other advanced markets, banks net interest income has declined compared to fee and commission income. Net interest income fell from two thirds of Dutch banks total income in 1995 to just over a half in 2000, according to the Dutch central bank. Three banking groups - ABN AMRO, ING and Rabobank dominate Dutch banking. Both ABN AMRO and ING are international financial institutions with activities across Europe and North America. Rabobank is one of Europe s leading co-operative banks. ING, which owns Postbank in the Netherlands, is a major international insurance provider. Insurance activities account for approximately two thirds of its net profits. ING has a significant presence in North America it is one of the ten largest life insurers in the US and the second largest non-life insurer in Canada. ING s international banking interests include BBL in Belgium and BHF and DiBa in Germany. ING has also launched banking operations under the ING Direct brand in France, Italy and Spain. ABN AMRO is one of Europe s largest financial institutions. Its activities cover three areas consumer & SME banking, wholesale banking, and private clients & asset management. Globally, it has over 3,500 branches and over 100,000 employees. It has significant banking operations in Brazil and the Midwest of the United States. Rabobank has some 375 local co-operative banks in membership. These in turn have over 800,000 members and some 9 million customers. Rabobank acts as treasurer for the local banks, is responsible for ensuring they comply with the Dutch central bank s capital adequacy and liquidity requirements, and has the power to replace their management in the event of non-performance. Other important banks include Fortis, the Belgian-Dutch bancassurance group. Fortis owns VSB in the Netherlands and beat ABN AMRO in the battle to acquire Générale Bank, Belgium s largest bank. BankEcon Intelligence and Information on European Banking 33

36 Dutch Banking Key Statistics 2000 Balance Sheet Consolidated ( bn) Balance Sheet Domestic Operations ( bn) Number of branches - of which abroad Number of employees - of which abroad 1, , ,961 2, , ,851 Note: Consolidated figures cover the consolidated business of credit institutions registered in the Netherlands covering both total domestic operations and foreign branches and participating interests. Sources: De Nederlandsche Bank, NIBE-SW Bankenboekje, NVB Largest Dutch Banks Key Figures 2000 ( millions) Net Profits Year End Assets Risk Asset Ratio Return on Equity ING 4, , % 12.2% ABN AMRO 2, , % 26.5% Rabobank 1, , % 10.1% Notes: 1. Figures are consolidated group figures. 2. ING: Net profit is operational net profit. Risk Asset Ratio is for ING Bank. Source: Company Earnings Statements and Annual Reports. BankEcon Intelligence and Information on European Banking 34

37 Norway Main Characteristics The Norwegian market is one of the most concentrated in Europe. According to the central bank, the three largest banks DnB, Union Bank of Norway and Nordea Norway - account for more than 50% of the market as measured by total assets. DnB (previously Den norske Bank) is Norway s largest bank. DnB acquired Postbanken, the state-owned postal bank, in The Norwegian government remains a significant shareholder in DnB. Postbanken controls the largest retail customer base in Norway. The Postbanken brand/distribution channel has been retained alongside the DnB brand/distribution channel within the enlarged DnB Group. The former is targeted at the mass market and the latter targeted at more upmarket customers. Union Bank of Norway - formed from the merger of Union Bank, Norway s largest savings bank, and Gjensidige, a Norwegian insurer - is the country s second largest bank. In April 2001, the Norwegian Association of Savings Banks gave UBN permission to demutualise. After an extended battle with Sweden s Handelsbanken, in October 2000 Nordea (then MeritaNordbanken) won the government auction for Christiania Bank, the third of Norway s three major banks. The acquisition of Christiania completed Nordea s presence in all four of the large Nordic markets. Recent Developments April 2001: Union Bank of Norway, second largest bank, is given permission to demutualise and become a limited company. October 2000: Nordea (MeritaNordbanken) wins government auction for Christiania Bank. March 1999: DnB announces its acquisition of Postbanken, Norway s fourth largest bank. February 1999: Storebrand, Norway s leading insurer, takes over Finansbanken, a private Norwegian bank. End 1998: Den Danske Bank of Denmark beats Svenska Handelsbanken of Sweden to acquire Fokus Bank, Norway s fifth largest bank BankEcon Intelligence and Information on European Banking 35

38 Largest Norwegian Banks NOK Billions Total Assets DnB Christiania (Nordea Norway) Norwegian Banking Sectors 2000 NOK Billions Total Assets Commercial Banks Savings Banks Total 1,352.4 Note: Commercial Banks includes Postbanken Sources: Statistics Norway and Norges Bank (Central Bank) Gjensidige NOR Sparebank (Union Bank of Norway) Fokus Bank 50.2 SpareBank 1 SR-Bank 43.6 Handelsbanken 33.4 SpareBank 1 Nord-Norge 33.1 SpareBank 1 Vest 31.1 SpareBank 1 Midt-Norge 30.9 BN Bank 29.0 Notes: 1. Handelsbanken branch of Handelsbanken of Sweden. 2. Fokus Bank owned by Danske of Denmark. 3. Swedbank of Sweden owns 25% of SpareBank 1 Gruppen. 4. NOK / rate at end 2000 = 8.23 (Source: ECB). Source: FNH BankEcon Intelligence and Information on European Banking 36

39 Portugal Main Characteristics The five main banks in Portugal are: Caixa Geral de Depôsitos (CGD), state-owned with a market share of some 25%. Banco Comercial Português (BCP), the second largest financial group and largest private bank. BCP owns 24.5% of Eureko, the pan-european insurance group. Banco Espirito Santo (BES). Banco Português de Investimento (BPI). SCH of Spain. SCH acquired BTA and CPP from the Champalimaud group, giving it an 11% share of the Portuguese market. Market concentration is high. CGD and BCP had a market share of around 50% in 2000 according to the central bank. The market share of the five major banking groups was over 80% at end With SCH now a major presence in Portugal, the market share of nondomestic banks increased from 12.7% of total assets at end 1999 to 20.6% at end 2000 according to the central bank. The break-up of the Champalimaud group during has significantly reshaped Portugal s banking sector. Champalimaud accounted for some 20% of the banking market through its control of Banco Pinto e Sotto Mayor (BPSM), retail bank Banco Totta & Açores (BTA), mortgage bank Crédito Predial Português (CPP), investment bank Banco Chemical Finance, and insurance company Mundial Confiança. Recent Developments April 2000: BCP acquires BPSM. BCP also acquires Banco Mello and Companhia de Seguros Império during March 2000: BES and BPI merger plans collapse. January 2000: Banco Espirito Santo (BES) and Banco Português de Investimento (BPI) agree to merge, forming BES.BPI. November 1999: After protracted battle and Portuguese government and European Commission involvement, plan for break-up of Champalimaud group agreed: SCH acquires BTA and CPP CGD acquires Mundial Confiança BCP acquires BPSM BankEcon Intelligence and Information on European Banking 37