Banking with Interest
Bank M&A was “miserable” in 2023. Will this year be even worse?
Jan 30, 2024
Naomi Snyder, Editor-in-Chief of Bank Director, discusses why the bank M&A market was so bad in 2023 and the obstacles faced, including asset quality, pricing expectations, lack of suitable targets, cultural integration, and regulatory approval challenges. The chapter also explores the potential changes and proposals in bank M&A, such as dropping a 1996 OCC rule and collaboration with other agencies to assess competition in the industry.
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Quick takeaways
- The bank M&A market was poor in 2023, but experts believe it could improve in 2024 due to lower interest rates and improved stock valuations.
- Competition for deposits is a major factor in bank M&A, with banks seeking attractive deposit bases and focusing on banks with large branch networks.
Deep dives
Outlook for Bank M&A in 2024
The 2024 Bank M&A survey by Bank Director reveals that only 34% of respondents believe they are likely to acquire another institution by the end of the year, down from 39% in 2023. However, experts believe that the M&A environment could improve in 2024, following a year of historically low deal volumes and poor industry performance. Lower interest rates and improved stock valuations in October are expected to drive more deals forward. Despite economic uncertainty being less of a factor, obstacles to bank M&A include asset quality, pricing expectations, lack of suitable targets, and cultural integration.
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