M&A: Cross Border Or Across The Board

Research evidence excerpt

M&A: Cross Border Or Across The Board

Deutsche Bank

Research

Emerging Europe Industry Date

Europe 6 July 2026

European Banks

Banks Special Report

Banks

M&A: Cross Border Or Across The

Board

Giovanni Razzoli, CFA

European Banking Sector Re-rating and M&A Drivers Research Analyst

The European banking sector has undergone a significant re-rating, supported by

Sharath Kumar

stronger profitability, excess capital and a favourable rate environment. This has

Research Analyst

reignited M&A activity, primarily through domestic transactions. While

consolidation still offers scope for value creation, we believe a meaningful share of Rishika Garg

the potential benefits is already reflected in valuations following the sharp rally in Research Associate

European banks since early June (SX7E index +12%). Our analysis suggests that Benjamin Goy

M&A can generate mid-single-digit EPS accretion and value creation, although Research Analyst

outcomes remain highly dependent on deal structure and execution. Alfredo Alonso

Favorable Conditions for M&A Acceleration Marlene Eibensteiner

The structural shift in rates has created one of the most supportive environments for Research Analyst

consolidation in over a decade. Sector ROTE has roughly doubled since June 2021,

Robert Noble

increasing incentives to execute M&A to drive growth, enhance scale and fund

investments. Excess capital has further strengthened the case for consolidation,

with average CET1 buffers at 12% of market cap. Meanwhile, the sector re-rating Miriam Killian

has strengthened the relative position of Southern European banks, increasing the Research Analyst

strategic rationale for cross-border combinations. Atul Hanamante

Research Associate

M&A Trends: Fewer Deals, Higher Value Gunjan Bhatt