In February 2019, BB&T announced its acquisition of SunTrust Bank for about $28 billion in stock[1]. In December that year, the nation’s 6th biggest bank, Truist, was created[2]. There are, of course, a multitude of reasons why financial institutions merge. A classic explanation is that they wish to obtain economies of scale by combining overlapping operations in particular markets. As regional commercial banks with a heavy consumer focus, both these institutions faced earnings pressure from developing headwinds in the mortgage market as interest rates climbed in 2018. (Table 1).
|
Archives
March 2021
Tags
All
|