Rumours are circulating about a potential tie up between structured products stalwarts SG CIB and BNP Paribas. Other buzz regards a tie up between Unicredit and SG CIB. And who could ignore the ongoing battle to buy ABN Amro?
But what does this all mean for the structured products markets? Any merger (whether it be of equals or of one dominant and one smaller institution) carries execution risk. It usually takes a while for the wrinkles to be ironed out. And in such scenarios clients inevitably suffer.
Going forward, however, once a merger has run its course, clients often benefit from economies of scale (although that's providing the merging institutions have streamlined their business lines effectively). Just imagine the structured products prowess of a combined BNP/SG, a BarCap/ABN or RBS/ABN.
Will the ties up be a good thing for the structured products distributor? Will there be synergies between the investment bank's structured products desks? Or will the rumoured mergers have no impact?
As always, if you have any thoughts, do let me know...