BofA Deal May Trigger Bank M&A

An outside spokesman to a private equity firm that has been active in the banking sector offered this interesting tidbit from his client: private equity firms are eyeing investing in regional banks in order to give them enough capital to pursue acquisitions.

Such a deal makes sense both for regional banks that may not have enough capital to do their own deals, and for private equity firms that want to buy banks but are put off by all the regulatory obstacles. The only hitch for private equity, and it's a big one, is they don't have control over the entity they invest in. Still, for potentially acquisitive regionals and super-regionals like US Bancorp (USB), SunTrust (STI), and Regions Financial (RF), a marriage with the right private equity firm could make sense.

-- Written by Dan Freed in New York.

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