Feb 10, 2019

BB&T and SunTrust's mega merger

The big M&A deal of the week was the announced merger of BB&T with SunTrust, two large regional banks who between them cover most of the southern and eastern USA. The deal even arrived with its own bespoke website, thepremierfinancialinstitution.com. (The actual name of the combined bank is still TBD.)

Data: FactSet Universal Screening; Chart: Harry Stevens/Axios

The big picture: The merger is ambitious. The word "mega-bank" has been thrown around, and a new headquarters is going to be built in Charlotte, North Carolina, a storied banking town that's currently home to only one major bank, Bank of America. (The other huge Charlotte bank, Wachovia, was swallowed up by Wells Fargo during the financial crisis.)

The deal doesn't really change the American banking landscape, however, which remains dominated by the Big Four universal banks.

  • America still has thousands of banks, with new ones still arriving. The tiny BankFlorida, for instance, with just one branch, is set to IPO this week.
  • On a global level, regional American banks remain small. BB&T and SunTrust, together, will have about $441 billion in assets. That's enough to make them the 65th biggest bank in the world, per a 2018 S&P ranking.
  • The combined bank will be smaller than Spain's CaixaBank; less than half the size of China Minsheng Bank; less than a third of the size of France's Group BPCE; and less than a ninth of the size of China's ICBC.

Context: Size isn't always a good thing. Germany's Deutsche Bank, for instance, has assets of $1.78 trillion. That makes it more than four times the size of BB&T and SunTrust combined. Its market capitalization, however, is just $17.3 billion, which is significantly lower than either of those U.S. banks on their own.

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World Bank changes hiring rules after asking Taiwanese staff to get Chinese passports

World Bank President David Malpass. Photo: Mandel Ngan/AFP via Getty Images

The World Bank has revised its staff rules after Axios reported in December that the bank had asked Taiwanese employees to obtain Chinese passports.

Why it matters: The revised rule, issued on Dec. 19, states that the World Bank gives hiring preference to nationals from member states, but does not prohibit hiring non-member state nationals. China has sought to squeeze out Taiwanese nationals from international institutions. The World Bank's new rules represent a compromise position.

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The Fed opens its doors to fintechs

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The Fed is extending invitations to financial technology companies (and other companies interested in fintech) for face-to-face conversations. The sessions are called "financial innovation office hours,” the central bank announced Tuesday.

Why it matters: This is a first for the Fed board, though the San Francisco regional bank has hosted similar events in the past.

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Bank of England chief puts finishing touches on climate change legacy

Photo: Kirsty Wigglesworth/WPA Pool via Getty Images

With just a month left before he steps down as head of the Bank of England (BoE), Mark Carney is putting the finishing touches on his legacy at the British central bank.

Driving the news: The BoE laid out how it planned to test the resilience of the U.K.'s largest banks and insurers in increasingly threatening environmental scenarios. It’s a notable step for Carney who's "played a key role in highlighting financial risks from global warming," as Bloomberg notes.

Go deeperArrowDec 19, 2019