_edited.png)
By: Thomas Podrasky | tap5517@psu.edu | February 7, 2019
A decade after the Great Recession, the country may soon see its first big bank merger in over ten years. Earlier this week, the BB&T Corporation announced that it is set to buy SunTrust in a deal worth 28.2 billion dollars.
The two banks are on the larger side, with BB&T and SunTrust ranked 13th and 14th biggest in the nation respectively. The merger would combine BB&T’s 225 billion dollars in assets with SunTrust’s 215 billion. If the deal goes through, the newfound bank will rank in the top ten for total assets moving ahead of brand names like PNC and the TD Group.
Both companies have been doing well recently. BB&T listed a 2% increase in deposits and SunTrust recorded a 1% increase from a year prior in the 4th quarter. Interestingly, these gains come at a time when many medium and small banks are struggling to record growth.
Among the main reasons the two banks are seeking a merger is so that they can better compete in digital banking against industry giants like J.P Morgan and Bank of America. The past couple of years has seen both companies shut down numerous branch locations as customer preferences are increasingly shifting towards a more automated online experience. The combined company should have more money to invest in developing a better online banking experience.
Thanks to the Trump administration’s easing of restrictions, this deal may open up the floodgates, allowing other large banks to make similar mergers which could cause an increase in consolidations. As medium and small banks struggle to maintain profit, some will likely be bought out by larger firms. The proposed merger must first be approved by the FTC, but if it passes, it will likely have a long-lasting impact on the banking industry.
Sources:
コメント