One rulebook for bank mergers and divisions

11 February 2026

Authors: Isabelle Algoet, Simona Dodaro, Levi Eli Halewyck

Mergers and divisions can reshape a bank’s business and risk profile. Until now, only some euro area countries have required prior authorisation by supervisors for mergers and divisions involving banks, with the ECB acting under the national powers framework for mergers involving significant institutions.

The EU’s amended Capital Requirements Directive (CRD VI) changes this by setting common standards for supervisors across Member States. This ensures a level playing field for supervised banks and strengthens financial stability, as it provides reassurance that banks involved in mergers and divisions continue to meet prudential requirements. The CRD VI rules are applicable as of January 2026, and they become enforceable as soon as they are implemented into national laws by each country.

Consolidation transactions, such as mergers, are usually carried out for strategic reasons. When well executed, they can make the banking system stronger. However, they also carry risks. In 2021 the ECB published the Guide on the supervisory approach to consolidation in the banking sector, outlining how these deals are reviewed by supervisors. The Guide will remain applicable under the new CRD VI rules.

What to do when planning a merger/division

Based on the new legal framework, banks involved in a merger or division are encouraged to notify the ECB via the IMAS Portal. The notification should come from the newly merged entity or, in the case of a division, the entity being split. Information requirements follow the draft EBA standards, which allow simplified submissions in certain cases. The ECB strongly recommends engaging with supervisors as early as possible. This helps to ensure smoother processing by clarifying documentation needs and timelines and reducing the risk of incomplete submissions.

Mergers and divisions often go hand-in-hand with other supervisory processes, such as authorisation of qualifying holdings, or granting or withdrawing banking licences. In these cases too, the ECB encourages banks to engage in pre-notification discussions with supervisors to clarify all the required steps. For questions on mergers and divisions, please contact AUT_mergers_divisions@ecb.europa.eu.

How is each transaction assessed

The ECB normally evaluates applications against five key criteria:

• Reputation of the financial stakeholders involved
• Soundness of the financial stakeholders
• Ability of the new entity to meet prudential requirements
• Feasibility and prudential soundness of the implementation plan
• Risks related to money laundering or terrorist financing

In assessing the points above, the ECB collaborates with the European anti-money laundering authorities and all other relevant authorities.

The CRD VI allows supervisors to waive assessments of mergers within the same group, including within groups which are linked to a central body and supervised as a group. In line with its efforts to streamline supervision, the ECB aims to apply a risk-based approach. For these types of mergers, as long as there are no supervisory concerns, the ECB may issue a confirmation that it will not oppose the transaction within 60 working days from the moment the application is complete and ready to be processed. The merger can then proceed, subject to the other necessary approvals.