The announced merger between BB&T and SunTrust, valued at US$28.3bn, will be the largest banking merger since the financial crisis. Completed banking mergers totaled US$19.7bn during 2018, the lowest level in more than two decades, although a more permissive regulatory environment is likely to see more deals, analysts say.
The banks hope to close the deal later this year. “The BB&T/SunTrust merger will open more eyes on the potential for more sizeable bank M&A to occur,” says Jefferies analyst Ken Usdin.
Not everybody was pleased about the deal. “This proposed merger between SunTrust and BB&T is a direct consequence of the deregulatory agenda that Trump and Congressional Republicans have advanced,” says Maxine Waters, chairwoman of the House Financial Services Committee.
“The proposed merger raises many questions and deserves serious scrutiny from banking regulators, Congress and the public to determine its impact and whether it would create a public benefit for consumers.”
BB&T and SunTrust say that the combined bank would produce annual cost savings of around $1.6bn by 2022. The merger will allow them to invest more heavily in new technology demanded by customers.
The combined company will operate under a new name and have around US$442bn in assets, US$301bn in loans and US$324bn in deposits. It will rival US Bancorp, which has about US$467bn in assets. It will cover the US East Coast.