Banks face pressures to refocus their business models and cut costs, pushing consolidation down the list of management priorities, Frederic Oudea, chief executive of Societe Generale (>> SOCIETE GENERALE), told a conference on Thursday.

“Consolidation is not at all on top of the agendas of bank CEOs,” Oudea said. “We are a sector that is facing a huge transformation (and) my first focus is on what I can achieve organically.”

Cross-border banking acquisitions in the euro area peaked in 2007, when a consortium led by Royal Bank of Scotland (>> Royal Bank of Scotland Group plc) bought ABN Amro in a deal that turned disastrous for all parties.

Some bankers had predicted that the launch of a common supervisor for large European banks in 2014 would create transparency and uniform capital structures, paving the way for cross-border combinations.

But big deals have been elusive as bankers grapple with new capital requirements and regulations that make complex banks more expensive to run.

While markets may put some banks under pressure to expand through acquisitions, banks themselves are not yet ready, said Federico Ghizzoni, CEO of Italy’s UniCredit (>> UniCredit SpA), noting cross-border banks are hard to operate and cost savings from consolidation are difficult to achieve.

Another challenge dulling cross-border desire is the cost of upgrading technology, Oudea said.

So-called fintech firms like Paypal (>> Paypal Holdings Inc) and others are encroaching on traditional banking turf and threaten to take away business, just as banks invest billions in modernizing their IT infrastructure.

Wolfgang Fink, co-chief executive of Goldman Sachs (>> Goldman Sachs Group Inc) in German and Austria, said the creation of a single European banking market would increase chances for consolidation, but anybody considering a cross-border move would be under close market scrutiny.

Germany, for example, could be attractive for acquisitive foreign banks, even if only due to the size of the economy. But German banks may, if they get their houses in order and increase profitability, be the ones who go shopping abroad, Fink said.

(Editing by David Holmes)

By Thomas Atkins and Jonathan Gould