France’s BNP Paribas says there are too many European banks

France’s BNP Paribas on Thursday said there are simply too many European lenders for the region to be able to compete with rivals from the U.S. and Asia, calling for the creation of more homegrown heavyweight banking champions.

Speaking to CNBC’s Charlotte Reed at the Bank of America Financials CEO Conference, BNP Paribas Chief Financial Officer Lars Machenil voiced his support for greater integration in Europe’s banking sector.

His comments come as Italy’s UniCredit ups the ante on its apparent takeover attempt of Germany’s Commerzbank, while Spain’s BBVA continues to actively pursue its domestic rival, Banco Sabadell.

“If I would ask you, how many banks are there in Europe, your right answer would be too many,” Machenil said.

“If we are very fragmented in activity, therefore the competition is not the same thing as what you might see in other regions. So … you basically should get that consolidation and get that going,” he added.

Milan-based UniCredit has ratcheted up the pressure on Frankfurt-based Commerzbank in recent weeks as it seeks to become the biggest investor in Germany’s second-largest lender with a 21% stake.

UniCredit, which took a 9% stake in Commerzbank earlier this month, appears to have caught German authorities off guard with the potential multibillion-euro merger.

German Chancellor Olaf Scholz, who has previously called for greater integration in Europe’s banking sector, is firmly opposed to the apparent takeover attempt. Scholz has reportedly described UniCredit’s move as an “unfriendly” and “hostile” attack.

Germany’s position on UniCredit’s swoop has prompted some to accuse Berlin of favoring European banking integration only on its own terms.

BNP Paribas’s Machenil said that while domestic consolidation would help to stabilize uncertainty in Europe’s banking environment, cross-border integration was “still a bit further away,” citing differing systems and products.

Asked whether this meant he believed cross-border banking mergers in Europe appeared to something of a farfetched reality, Machenil replied: “It’s two different things.”

“I think the ones which are in a nation, economically, they make sense, and they should, economically, happen,” he continued. “When you look at really cross border. So, a bank that is based in one country only and based in another country only, that economically doesn’t make sense because there are no synergies.”

Earlier in the year, Spanish bank BBVA shocked markets when it launched an all-share takeover offer for domestic rival Banco Sabadell.

The head of Banco Sabadell said earlier this month that it is highly unlikely BBVA will succeed with its multi-billion-euro hostile bid, Reuters reported. And yet, BBVA CEO Onur Genç told CNBC on Wednesday that the takeover was “moving according to plan.”

Spanish authorities, which have the power to block any merger or acquisition of a bank, have voiced their opposition to BBVA’s hostile takeover bid, citing potentially harmful effects on the county’s financial system.