Goldman bankers see rising case for European bank mergers

European bank mergers are back on the table for Goldman Sachs bankers, and the implications inside the firm go well beyond headline deal chatter. Dirk Lievens, Goldman’s Europe head of financial institutions, said the rationale for M&A among European banks was rising even as cross-border tie-ups remained hard to execute.

The June 9 remarks mattered because they pointed to a live pipeline in one of Goldman’s most important coverage areas. Lievens framed the core question as how banks should deploy capital most productively after a stretch of unusually strong profitability over the past two years. For Goldman’s FIG bankers, that kind of debate can translate into advisory mandates, financing assignments and the follow-on capital markets work that often comes with a merger, a minority investment or a capital return plan.

The work also tends to change the internal pressure profile. In a market where big cross-border combinations are still blocked by politics, regulation and national interests, juniors need more than valuation skill. They need to understand regulatory capital, board dynamics and whether a deal is actually feasible in Germany, Spain, Italy or elsewhere in Europe. For senior bankers, the pitch is simpler: if profitability creates optionality, optionality creates fees, and the banker who helps define the strategic logic can stay close to the most senior client conversations.

Goldman has already reorganized the group around that opportunity. In January 2025, the firm named Lievens co-chair of global FIG, alongside John Mahoney, while Stephen Considine and Mathieu Munuera became co-heads of FIG in EMEA. That setup suggests the bank expects European financial institutions work to stay central to the franchise, with more mobility across teams if the deal cycle broadens from isolated domestic transactions to larger strategic situations.

The backdrop helps explain the optimism. The European Central Bank said in 2021 that bank M&A in the euro area had been subdued since the global financial crisis, with most activity domestic and focused on smaller targets. The ECB also said consolidation had made the market more concentrated, but still left room for efficiency gains. More recent sector data suggest the sector has the balance sheet capacity to think bigger: the European Banking Federation said the number of credit institutions in Europe fell to 4,834 in 2024, while branch numbers slipped to about 126,952 and total assets reached €45.1 trillion.

The balance sheets are also healthy. ECB consolidated data for end-June 2024 showed EU-headquartered credit institutions with €32.70 trillion of assets, a 1.95% non-performing loan ratio, a 16.26% CET1 ratio and a 5.10% return on equity. S&P Global said in late 2024 that the revival in European bank M&A was being driven by strong profitability, citing BBVA’s roughly €12 billion bid for Banco Sabadell, UniCredit’s stake-building in Commerzbank and its offer for Banco BPM. EY added in 2025 that rate cuts, scale benefits, regulatory updates such as the Danish Compromise and technology investment needs were all supporting deal activity. For Goldman’s FIG teams, that means a more active stretch ahead if Europe’s banks decide that the best use of capital is not to sit on it.