Banking: Can UniCredit be bigger than the sum of its parts?

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Banking: Can UniCredit be bigger than the sum of its parts?

Foreign exchange history is littered with the corpses of institutions that have looked at the industry and then decided to enter the market and become significant players. Now the perceived wisdom is that it is harder than ever for someone new to break into even the top 20, let alone the top five.

As the Euromoney FX poll has consistently shown, the market has been concentrated into the hands of fewer and fewer banks. In 2007, the top five accounted for a staggering 60.7% of the market.

And yet clearly the hundreds of banks that account for the rest of the market are not in it purely for fun. Some might offer FX as an ancillary service but the vast majority are still "in it to win it". But to capture market share from the big players is clearly a big task.

At first glance, UniCredit might seem an unlikely tip to be the banking group that manages to upset the status quo. The bank was ranked 31st in the 2007 Euromoney FX poll. And although the bank has grown rapidly by acquisition and merger, it has remained below the radar screen of many market participants. For instance, when the high-profile appointments of Keenan Altunis and Steve Turner as global head of FX sales and global head of hedge fund sales for FX was announced in September 2005, the two former Deutsche Bank employees must have got tired of responding to the question "Uni who?".

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