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HomeBank CapitalCapital Calls: U.S. bank mergers

Capital Calls: U.S. bank mergers

A Wall Street sign is pictured outside the New York Stock Exchange amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri

Concise insights on global finance.

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DEAL COPS. New York Community Bancorp’s (NYCB.N) $2.6 billion acquisition of Flagstar Bancorp (FBC.N) isn’t usually the kind of deal that draws scrutiny in Washington. But Senate Banking Chairman Sherrod Brown is part of a group of Democrats who want regulators to crack down on consolidation. That gives pause to the slew of regional banks that have been in M&A mode.

These deals often make financial sense . Bancorp and Flagstar are among the medium-sized firms that have struggled in the near-zero interest rate environment. The combined company, with $87 billion in assets, would help them better compete against giants like JPMorgan (JPM.N) or fintech upstarts.

That’s why there has been a rash of tie-ups after a pause post-2008 financial crisis. Last year, First Citizens BancShares (FCNCA.O) announced a $2.2 billion acquisition of CIT Group (CIT.N) while PNC Financial Services (PNC.N) is buying the U.S. business of Spain’s BBVA (BBVA.MC) for $11.6 billion read more .

Last September, the Justice Department under Donald Trump signaled it could loosen bank merger reviews. With Democrats now in charge , regional lenders can expect more time under the microscope. (By Gina Chon)

On Twitter http://twitter.com/breakingviews

Earlier in Capital Calls:

Nestlé reaches for the vitamin pills read more

When rebranding turns into Abrdn read more

Westpac stumbles toward true north read more

The $2 trln toybox read more

Poland’s gaming giant pushes investors’ buttons read more

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Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.

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