National City Corp. chairman David A. Daberko said Monday that the banking industry's consolidation is just beginning.

"Consolidation will not only continue; most likely it will accelerate," Mr. Daberko said in prepared remarks for the Bank Administration Institute conference here. "Banks that can adapt and perform will see the opportunity to extend their market (share) ... by acquiring other banks - and nonbanks."

Mr. Daberko did not discuss National City's acquisition strategy but said surviving banks will be the ones that increase revenues with expanded product lines.

"The ability to manage through the inevitable shrinkage of core deposit profits and replace them with alternative sources of revenue will separate the winners from the losers," Mr. Daberko said.

Successful banks must also have a strong presence in subprime lending, brokerage, leasing, financial planning, annuities, homeowner's insurance, and life insurance, he said.

The speech painted a generally bright picture for the future of banking, which he called a growth business. He said banks still dominate the financial services industry with $1 trillion in market capital, compared with $100 billion for broker-dealers and $80 billion for credit card companies.

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