Citi CEO Says He’s Not Counting Out Struggling European Rivals

(Bloomberg) -- While European banks might be faltering amid a slower recovery from the global financial crisis, at least one U.S. competitor isn’t counting them out.

“I don’t and I never would discount the European banks,” Citigroup Inc. Chief Executive Officer Michael Corbat said in an interview at the World Economic Forum in Davos. “Don’t overestimate the U.S. banks’ position, and don’t underestimate the European banks’ position.”

Wall Street has deepened its penetration into the European Union in recent years, taking advantage of the whipsawing of European banks by debt crises and political upheaval, and now Brexit. That’s meant the environment in Europe has become ripe for consolidation among banks, Corbat said in the interview, with Bloomberg News Editor-in-Chief John Micklethwait. Germany has been examining whether it can fix its two largest lenders, Deutsche Bank AG and Commerzbank AG, by combining them into a single firm able to challenge foreign rivals.

“The industrial logic is certainly there for consolidation,” Corbat said. “The question is, do governments and regulators want to allow it to happen? We don’t know because we haven’t seen it. We hear talk that European regulators are ripe for that consolidation.”

Meanwhile, Corbat added, there isn’t a similar appetite among U.S. regulators for their country’s largest banks to get even bigger, which he said could be a mistake over time.

Read more: Corbat Says Brexit Means Citigroup Will Do Less in London

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