Hesari is trying to provoke, but Frank is right. At least when looking at the average performance of acquisitions globally.
While increasing size brings economies of scale and its own merits for banks, it’s not worth growing at any cost. While in asset management a single portfolio manager can manage a EUR 100m or EUR 10,000m fund and thus profits grow significantly with size, basic banking involves a lot of regulation and manual work that doesn’t necessarily scale. Especially since larger size tends to make banks more complex.
In addition, large acquisitions are costly: even if Nordea eventually achieves the synergies it is after, the benefit is more likely to flow to the sellers through a high purchase price. Cross-cultural acquisitions complicate integration even further.
I coincidentally reviewed value creation in acquisitions recently in Vartti.