This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

5 Ways Bank Mergers are Changing

Currently, European giants with significant U.S. operations like Royal Bank of Scotland (RBS) and Santander (STD) have begun to shop their non-European businesses and specialty assets like aviation finance arms, while U.S -based Regions Financial (RF - Get Report) has been in up and down discussions to sell its brokerage Morgan Keegan and Citigroup (C) has sought a buyer for its consumer lending unit OneMain. While, both assets have seen deal talks stall in recent days, they're indicative of the businesses that capital hungry banks may look to divest.

We project a rebound in deal activity in 2012 as capital deployment gains steam post capital analysis and review , banks continue to seek asset generating opportunities, seller expectations likely become more reasonable amid a still challenging macro backdrop, and as foreign banks pursue asset divestitures to generate needed capital," writes Marquardt. Evercore expects M&A to pick up with asset purchases most likely as some banks seek to grow assets, while sellers accept prices that make purchases more attractive.

1. "M&A potential real, but not necessarily a near term catalyst."

Underneath all expectations of bank consolidations is the disclaimer that deals are subject to an improving economy, which will push the value of bank assets and stock prices upwards. With U.S. growth still sluggish and stock gains muted in 2011, many now expect that momentum in the economy and the deals market will be deferred to the second-half of 2012.

"We believe that bank M&A will pick up in the second half of 2012 as Troubled Asset Relief Program TARP repay catalysts emerge and the economy progresses and as a result, we believe there is a meaningful opportunity for the group to outperform the rest of the financial sector in 2012," writes Jefferson Harralson of KBW in a January research note. Harralson adds that consolidations are most likely among small-to mid-cap banks, because of looser regulatory restrictions such as a lack of impact from the Durbin Amendment - and a lack of European exposure.

4 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
STL $13.40 -0.78%
BMTC $30.47 -0.62%
BPFH $12.16 -0.65%
BBT $38.97 -0.20%
FMBI $17.37 -0.17%


DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs