This could be biggest year for bank mergers since the late 1990s

Posted Tuesday, 14 January 2020 ‐ CNN

New York (CNN Business)Faced with low interest rates and intense competition for consumer deposits and loans from financial giants, regional banks may rush to merge this year to keep pace with larger rivals. So says Dick Bove, chief financial strategist at Odeon Capital and a veteran bank industry analyst, who tells CNN Business that this year could be the biggest for bank mergers since 1998.Already big banks may need to get even largerIn that year alone, Wells Fargo (WFC) bought Norwest, NationsBank acquired Bank of America (BAC); and Citibank and Travelers merged to form Citigroup (C). The Citi deal was the nail in the coffin for the Depression-era Glass-Steagall law that prevented banks from owning insurers and brokers — a merger that would have been illegal had Congress had not repealed it. Citigroup spun off Travelers (TRV) in 2002 as a separate company that it is now one of the 30 stocks in the Dow. Now banks are under pressure once again to grow."The nation's biggest banks have set a target to increase their market share by taking business from the biggest regionals," Bove said in an email to CNN Business. "The competitive battle is likely to force the regionals to merge to gain the cash flows and scale necessary to ward off the attack."That seems to have been the main impetus for last year's merger between Southeastern regional banking giants SunTrust and BB&T. That deal created a new bank — now known as Truist (TFC) — which is the sixth-largest bank in the United States.Bove will be talking about the outlook for big banks with CNN Business editor-at-large Richard Ques on the "Markets Now" live show Wednesday at 12:45 pm ET.Bove views low interest rates as a headwind for many banks, which have already enjoyed most of the gains from a series of stock buybacks. That, and the recent round of corporate tax cuts, has helped banks boost earnings."Banks are running out of the benefits that have driven the strong earnings performances in the past decade," Bove said.Quest will also be joined by Sam Stovall, chief investment strategist at CFRA, to talk about the markets. Stovall has said that the brief market sell-off earlier this month following the killing of Iranian General Qassem Soleimani in a US drone attack will prove to be just that.He added in a recent report that while investors expect Corporate America to post a slight drop in fourth quarter earnings actual results usually top analysts' expectations. Earnings could very well have increased in the fourth quarter — news that could keep the market rally going."Markets Now" streams live from the New York Stock Exchange every Wednesday at 12:45 pm ET. Hosted by CNN Business correspondents, the 15-minute program features incisive commentary from experts.You can watch "Markets Now" at CNN.com/MarketsNow from your desk or on your phone or tablet. If you can't catch the show live, check out highlights online and through the Markets Now newsletter, delivered to your inbox every afternoon. CNN Business' Molly Shiels contributed to this story.

Other articles published by CNN

Posted Monday, 25 May 2020 ‐ CNN

(CNN)Rwanda has introduced robots as part of its fight against coronavirus.With 314 confirmed cases of the virus as of May 22, the East African country has enlisted the help of five anti-epidemic robots to battle the virus. The robots were donated by the ...

Posted Monday, 25 May 2020 ‐ CNN

(CNN)It was a mouth-watering prospect for sports-starved fans everywhere. Four of the greatest athletes the world has ever known, on the golf course at the same time, offering us a glimpse of who they are when they aren't winning Major Championships and...

Posted Monday, 25 May 2020 ‐ CNN

(CNN)A Texas community hit by terrible tragedy months ago came together over the weekend to celebrate a survivor's first birthday.Paul Gilbert Anchondo was two months old when his parents died shielding him from a shooter at an El Paso, Texas, Walmart on ...

Posted Monday, 25 May 2020 ‐ CNN

(CNN)Several members of the graduating class at The Lovett School in Atlanta, Georgia, have tested positive for Covid-19, according to a letter from the school."The school has been notified by several Class of 2020 families that their students have...

Posted Monday, 25 May 2020 ‐ CNN

(CNN)Just when you thought you'd learned how to spell Grimes and Elon Musk's unusual baby name, they've gone and changed it.Earlier this month, Tesla and SpaceX CEO Musk announced the birth of the baby boy in a post on Twitter, revealing his son was...

Posted Monday, 25 May 2020 ‐ CNN

In this weekly column "Cross Exam," Elie Honig, a CNN legal analyst and former federal and state prosecutor, gives his take on the latest legal news. Post your questions below. The views expressed in this commentary are his own. View more opinion on CNN. ...

Posted Monday, 25 May 2020 ‐ CNN

Rome (CNN)"The doctors were shocked. They said they had never seen anything like this," says Valentina Vigilante, recalling the terrifying day her 6-year-old son Nicolò was rushed into intensive care in Bergamo, northern Italy, as he struggled to...

Posted Monday, 25 May 2020 ‐ CNN

(CNN)Vanessa Bryant, wife of the late Kobe Bryant, shared a sweet moment this Memorial Day weekend -- a film of their baby daughter's first steps. In a video posted to Instagram, 11-month-old Capri stumbles across the room for the first time, into the...

Posted Monday, 25 May 2020 ‐ CNN

(CNN)With two barren peaks that rise only about 170 feet above sea level, the now extinct Pūhāhonu volcano in the Northwestern Hawaii Islands doesn't look like much. This is especially true since in the same archipelago, Mauna Loa towers over every...

Posted Monday, 25 May 2020 ‐ CNN

(CNN)Photos and video of Memorial Day weekend celebrations across the US showed plenty of people going to the beach and gathering on boardwalks, but not a lot of people social distancing or wearing masks. From Florida to Indiana and across the country to ...

Posted Monday, 25 May 2020 ‐ CNN

Hong Kong (CNN Business)An online grocery business backed by Asia's richest man is expanding to hundreds of cities across India — a move widely seen as a challenge to Amazon (AMZN) and FlipKart.JioMart, the grocery platform owned by Mukesh Ambani's Jio ...

Posted Monday, 25 May 2020 ‐ CNN

(Kaiser Health News)As states relax coronavirus restrictions, older adults are advised, in most cases, to keep sheltering in place. But for some, the burden of isolation and uncertainty is becoming hard to bear.This "stay at home awhile longer" advice...

Posted Monday, 25 May 2020 ‐ CNN

(CNN)As warm weather sends people outdoors, some are encountering tenacious pests with no respect for social distance. Forget staying 6 feet apart: Ticks go for blood in the hardest-to-reach places on the human body. Many of those ticks are infected with ...

Posted Monday, 25 May 2020 ‐ CNN

(CNN)At a glance, it may look like many Americans have long forgotten about the dangers of coronavirus.Crowds packed beaches in Florida, Maryland, Georgia, Virginia and Indiana over the weekend -- many venturing out without masks and others failing to...

Posted Monday, 25 May 2020 ‐ CNN

(CNN)At first glance, Shelley Allwang's cubicle looks just like any other office space.But alongside a pinboard full of tchotchkes and a photo of her dog, sits a story that reminds Allwang of the importance of her job, now more than ever. "The Boy and...