FRANKFURT (Reuters) - Banks should consider joint ventures in certain areas and products, not only mergers and acquisitions, to be competitive globally, Deutsche Bank's <DBKGn.DE> CEO said on Friday.
Consolidation in the European banking sector has long proved problematic in the face of political and regulatory hurdles, both before and after the 2008 financial crisis, which have prevented lenders from achieving the desired cost savings.
Deutsche Bank's Chief Executive Christian Sewing, however, told a banking conference that consolidation must come "in the long run" because Europe has too many banks and needs stronger institutions to compete with the United States and Asia.
"We should also think about other ideas, like joint ventures, in certain areas, in certain products," Sewing said.
"You know we are always talking only about consolidation ... I think we need to think a bit more creatively than just consolidating."
Speculation that Germany's largest banks could tie-up with rivals has gathered pace this year.
But Sewing, at the helm of Deutsche Bank since April, has said that his bank needs to focus on becoming profitable on its own over the next 18 months before entertaining the idea of a merger or acquisition.
After three years of losses, a failed stress test in the United States, several attempts to restructure, a leadership shake-up and a ratings downgrade, many investors have lost faith in Germany's biggest bank, the shares of which have fallen by about 46 percent this year.
"One thing is clear," Sewing said, "I think we need a European answer to the Asian and U.S. platforms. And that means that banks and financial institutions need to work a lot more closely together."
(Reporting by Tom Sims; Editing by David Goodman)