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American Banker: Cross-Industry Mergers Expected to Grow "Credit News 24"

The American Banker is reporting that banks and credit unions should expect more cross-industry mergers; however, these cross-industry deals tend to be a one way street with credit unions acquiring banks.

The article notes that over the last 18 months seven banks have agreed to be sold to credit unions. These seven banks tended to be relatively small with an average asset size of almost $83 million.

The American Banker speculates that such cross-industry mergers are likely to continue as as regulatory costs, revenue pressure, succession and other issues spur more industry consolidation. One attorney commented that he is currently working on at least 13 deals, although some deals are not likely to occur.

One credit union official stated that a benefit for credit unions acquiring banks is the expansion of their customer base and footprint.

Moreover, the article stated that credit unions can be favorable acquirers of small, privately-held banks because credit unions can only pay cash and they tend to retain staff after the merger is completed.

Read the American Banker (subscription required).
Title : American Banker: Cross-Industry Mergers Expected to Grow "Credit News 24"
link : American Banker: Cross-Industry Mergers Expected to Grow "Credit News 24"