Banking Mega Merger

TLDR: This article discusses the trends and outlook for mergers and acquisitions (M&A) in the banking industry. Despite a tough year, banks turned to M&A to secure themselves or position themselves for growth. Deal activity in banking for the first three quarters of 2023 fell by 36% in value and 21% in volume compared to the previous year. Bank failures, such as First Republic Bank and Credit Suisse, and increased regulatory scrutiny prompted banks to divest noncore assets and acquire capital-light assets like wealth management. The article identifies three small waves of deals in 2023: acquisitions resulting from bank failures, divestitures to strengthen balance sheets, and acquisitions for growth. Looking ahead to 2024, the article suggests that there will be few big consolidation deals due to macroeconomic and regulatory uncertainties. Instead, there will likely be divestitures to strengthen the core and acquisitions for new engines of growth. Banks are advised to prepare for future deals by cleaning up existing businesses