From Reuters

GENEVA (Reuters) - Further cross-border bank mergers in Europe are almost inevitable even though they can be risky and structural differences between national markets make many potential deals unappealing, according to a report released on Tuesday.

Despite the lack of convincing arguments, many banks will feel pressured to entertain mid-sized takeovers to boost revenue during an economic cycle when new income at home proves hard to achieve, investment bank Credit Suisse First Boston said.

"Medium-sized acquisitions seem far more likely than full-blown crossborder mergers of equals," CSFB said in the note to clients.

Structural differences between local banking markets remain profound and cost savings achieved by combining scalable technology platforms often prove more difficult than expected, the report said.

"With proposed cross-border banking deals seemingly coming left, right and centre, you would be forgiven for thinking that a fully integrated European retail financial services market was just around the corner," CSFB said.

"In fact, nothing could be further from the truth."

Successful banks tend not to put themselves on the market, meaning that the most likely type of deal to come in Europe will be stronger banks buying smaller, weaker ones, CSFB said.