Investire | February 2025
The ongoing risk in the banking sector – triggered by years of fat cows for the banks – is based on obvious financial reasons, lowering of rates, economies of scale and scope, but seems to overshadow the consequences on the choices of the professionals who work there.
It is highly probable that the current risk could induce professionals – especially the best ones who have a market – to evaluate whether to stay or change bank, and this for at least four reasons.
The first reason is organizational: any merger or acquisition involves a series of complexities ranging from the choice of top roles, from the organizational chart to the review of remuneration aspects, from the organization of commercial and administrative structures, to the integration of systems, from internal and external communication to customer management.
Financial advisors and private bankers are very sensitive to these factors and the impact they have on their relationship with the client. Over the years we have witnessed significant departures of professionals from one bank to another due to major inefficiencies on this front.
The second reason is personal. Those who work in a bank absorb its values and culture and often also develop a sense of belonging and have personal aspirations that may or may not be frustrated by integration with another reality.
All this has an even greater impact the greater the difference between the realities at stake in terms of image perceived by all stakeholders, employees, customers and shareholders.
In fact, the third reason is linked to the image of the banks at stake.
It is surprising – for those who work as market analysts – that there is almost never a scientific calculation of the brand value of the banks being acquired and integrated, and that, consequently, the value of brand equity rarely enters the industrial plans of takeover bids, if not at the same level as the so-called financial synergies and tax advantages, then at least as one of the variables.
On the other hand – compared to the Anglo-Saxons and the French – we Italians tend to underestimate the value of our brands and historic brands, not wanting or – perhaps – not knowing how to exploit their potential. The little attention paid to the value of the image is even more surprising when there are real icons at stake which – in the right hands – could make a difference on the market.
The fourth reason that leads a professional to evaluate whether to stay or change bank is connected to the reputation and leadership of the management. A strong reputation and leadership, a clear strategy, choosing the right people and above all the ability to communicate all this efficiently are crucial to the success of any hostile or non-hostile takeover.
There have been recent cases – such as that of Intesa Sanpaolo and UBI – of success with successful integration and in a relatively short timeframe, which required enlightened and credible managers, economic efforts, significant time and resources and great communication skills both internally within the bank and externally on the market.
Behind the success of M&A operations in the banking-financial sector there is almost always recognition by the conqueror of the honor of arms and the valorization of the conquered’s top figures in the new reality.
If you are not able to evaluate and manage the impact of all these four factors, the only certain thing is that the value of the new bank will be less than the sum of the two, and this with all due respect to the new shareholders.
Nicola Ronchetti