Lazard: Banking Sector Will Contract
The global banking industry will contract in the coming years as firms sell businesses, the vice-chairman of Bermuda’s Lazard Ltd. said today {Jan. 27].
“There will be less companies competing in the global wholesale business, but it won’t be by mergers,” Gary Parr said today in an interview with the Bloomberg financial news network. “It will be by a number of firms just departing the business. They’ll be shutting down, they may exit some lines or sell them.”
US and European banks are selling businesses and cutting back amid capital requirements, regulation and investor concern of a global recession. Financial firms globally announced more than 200,000 job losses in 2011, up from about 58,000 in 2010, according to data compiled by Bloomberg.
Mr. Parr said the world’s largest banks won’t get bigger than they are now.
“When you look at the capital charge and the regulatory things that get layered on when you get to a certain size, it is better to be smaller,” Parr said.
Mr. Parr, 54, has been a director of Hamilton-based Lazard, the world’s largest independent merger adviser, since 2010 and joined the firm in 2003.
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