... believes incentives for further sector consolidation involving some mid-sized Spanish banks are increasing. The need to achieve greater scale to produce adequate returns in a low interest rate and competitive domestic banking environment and/or to cope with higher capital pressures could foster this process from late 2016. In Fitch's view, foreign investors/banks are likely to have fewer incentives to be predators of mid-sized Spanish banks than large domestic banks. Short-Term Resistance: Fitch believes that consolidation movements are not likely to occur imminently because the medium-sized banks can probably withstand near-term pressure. Instead, we expect mid-sized banks to focus on strengthening their standalone viability in 2016 through balance sheet de-risking (i.e. sales of problem assets), further cost rationalisation plans and/or debt or equity issuances to enhance their capital structures in the context of higher regulatory capital...
