Meanwhile, potential bank investors looking for an M&A catalyst should have a healthy amount of skepticism. "While there has been some M&A activity over the last few quarters, we believe a major uptick in activity is unlikely unless shares of potential buyers show material improvement and/or seller expectations become more realistic," writes Robert S. Patten of Morgan Stanley in a January research note.
"If you are looking at an M&A trade, you have to be careful," adds McGratty of KBW.
-- Written by Antoine Gara in New York
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