That is according to Bob Diamond, chief executive officer (CEO) of Barclays, who, in an interview with the Business Times, has said a period of consolidation will characterise the sector in the next 12 months or so, Reuters reports.
Mr Diamond explained that financiers will focus mainly on areas where they are strong by getting rid of their riskier assets to ensure their futures.
"Banks will make sure they're only doing things where they have some kind of competitive edge and scale," he stated.
The official noted that the majority of banks across the continent are struggling due to a lack of structural planning as opposed to a lack of capital, with this being the primary reason for them failing stress tests.
This comes after Mr Diamond's colleague Chris Lucas, finance director at Barclays, called for reforms to be made to accounting practices for lenders in Europe and the US.
By Claire Archer