Banking acquisitions should be geared at European expansion, according to UniCredit Chairman Pier Carlo Padoan, who warned against agreements that made institutions more domestically oriented in a newspaper interview on Monday.

When asked about the possibility of post-pandemic banking mergers and acquisitions (M&A), Padoan told the daily La Stampa that he believes the scenario would encourage the sector to consolidate.

“We must not allow banks to become increasingly national rather than European,” he warned.

“There is a scenario, not necessarily the most likely one, in which there could be more concentration in Italy and fewer cross-border deals. This would be like going against the European Banking Union.”

With operations spanning across 13 markets, UniCredit is Italy’s only bank that regulators deem to be of global systemic relevance.

Under new Chief Executive Andrea Orcel, UniCredit in October walked away from a deal with Italy’s government to take on bailed-out rival Monte dei Paschi.

Asked if the deal could be revisited, Padoan said the window of opportunity had closed and UniCredit was focused on implementing the strategic plan Orcel unveiled this month.

Orcel, a veteran dealmaker formerly at UBS and Merrill Lynch, has not ruled M&A saying UniCredit could consider deals that strengthen its franchise and returns for shareholders.

Under its plan through 2024, UniCredit plans to return 16 billion euros as dividends and buybacks.

Padoan reiterated that the bank would consider M&A opportunities in Italy and abroad if they arise and are in the interest of shareholders.

Turning to organisational changes triggered by the COVID-19 pandemic he said that UniCredit wanted to turn remote working into an opportunity.

“We currently require staff in central offices to come in two days a week. Once the emergency is over, we’ll switch to a hybrid model on a voluntary basis. Naturally in branches the proportions will have to be very different.”