Asia Pacific banking consolidation will intensify in 2010 according to IDC

The Asia Pacific banking sector will see a notable increase in mergers, acquisitions and consolidati

With the recovery from the global financial crisis gathering pace, banks will become more aggressive in gaining size through inorganic growth and will feel more confident in revisiting regionalisation plans, says the latest study by IDC Financial Insights Asia Pacific

The report, Business Strategy: Banking Consolidation in Asia/Pacific - Which Banks Are Most Likely to Succeed in 2010?, states that the growing dominance of large banks highlights two issues that caused the recent financial crisis: Too-big-to-fail and systemic risk. However the Asia Pacific banks have emerged relatively unscathed by the crisis, giving them scope to further expand.

In 2010, governments across the region are expected to play a prominent role in banking consolidation. Michael Araneta, Senior Consulting and Research Manager at IDC Financial Insights Asia Pacific, said that governments of Thailand, Malaysia, Taiwan, Vietnam, and India are introducing salient changes to rules governing banking competition, which will lift the efficiency and competitiveness of the industry.

Araneta adds that since the super-regional banks in these regions are also becoming aggressive.