SocGen CEO says 2011 bank M&A boom unlikely: report

By Lionel Laurent

PARIS (BestGrowthStock) – Europe’s crisis-scarred banking sector is unlikely to undergo a wave of consolidation in 2011 as big lenders focus on hammering their business models into shape, Societe Generale’s chief executive told CNBC.

Banks face a new world of tougher regulation and economic uncertainty and large lenders will likely concentrate on organic growth for the next two years, Frederic Oudea told CNBC in an interview due to be aired on Wednesday.

“You will have specific situations where more consolidation is needed to make the banking system stronger … but I think it will be limited,” he said in comments released on Tuesday, reaffirming what he told Reuters in August.

France’s second-biggest listed bank, which has seen its stock price tumble some 70 percent since pre-crisis highs in 2007, is in the early stages of a turnaround plan to boost profits without a big merger or a capital increase.

The group is sticking to its targets and growth plan, Oudea told CNBC, though he said SocGen might consider selective acquisitions where possible.

He ruled out bank consolidation within France, following comments by rival Credit Agricole that it would not stand by were SocGen to be in play.

Banks have also struggled to allay market fears over euro-zone debt this year, with Spain and Portugal in the eye of the storm after Greece and Ireland were thrown financial lifelines.

SocGen’s Oudea ruled out a break-up of the euro zone but told CNBC market fears could persist in 2011 as investors kept a watchful eye on government bids to tackle debt. He denied, however, that a new round of bank stress tests was necessary.

“Generally, people totally overestimate the impact of any kind of scenario on this sovereign debt … I don’t think (a new stress test) is very needed,” said Oudea, adding that big banks would deliver good profits for 2010.

European Union leaders have agreed on a new round of stress tests for 2011 after the Irish rescue effectively negated the first batch, conducted in July, which had given Ireland’s banks a clean bill of health.

(Editing by David Holmes)

SocGen CEO says 2011 bank M&A boom unlikely: report