Also, more complex institutions are more difficult to manage, not to mention the difficult task of integrating IT systems. From my perspective, financial stability considerations need to be taken into account as well. A crossborder merger may increase contagion risk, as financial sectors become more interconnected.
After having addressed Too-Big-To-Fail problems at the national level, we would not want the problem to resurface at the European level. Banks could well become more difficult to resolve, as mergers typically make them larger and more complex. Of course the system has been strengthened to meet such concerns. But it has yet to be proven that this has eliminated Too-Big-To-Fail problems.