Unlocking the better in bigger

Article Abstract:

National City CEO David Daberko believes that the wave of mergers between large banking institutions will impact the competitive landscape only if the new banking powerhouses will achieve enough synergies to generate consistent earnings per-share growth. He contends that acquisitions will add value only if they are properly executed. In the short term, Daberko does not foresee big changes in regional banking as a result of mega mergers such as those involving Banc One Corp, Norwest Corp and NationsBank Corp. However, in the long run, he believes that well-managed acquisitions will strengthen all the parties involved and that successful combinations of their strengths will create a much stronger competitive force. Regarding his bank, Daberko claims that National City's acquisition strategy is geared towards smaller, underperforming banks.

Analysis, Interview, National City Corp., NCC, Daberko, David

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Momentum builds

Article Abstract:

The merger and acquisition (M&A) frenzy continues to grip the US banking industry. The announced value of bank and thrift deals in 1996 ($46.2 billion) was still substantial even though it was down from $74.4 billion in 1995. Banc One Corp's acquisition of First USA Inc and the merger between Dean Witter, Discover & Co and Morgan Stanley Group in the early months of 1997 bode well for bank M&A activity for the rest of the year. The boom in the M&A business is likely to continue if the current strong performance of the stock market persists. The consolidation pace could also accelerate with the return of market players that have finally sorted out and digested their 1995 acquisition. However, M&A activity could come to a halt if a major stock market correction or economic downturn occurs.

Industry Overview, Statistics

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Dealing from strength

Article Abstract:

Industry analysts are predicting a consolidation of the banking industry in 1997 due to a bullish stock market and positive economic fundamentals. 1996 saw several medium-sized mergers involving companies such as Bankers Trust New York Corp, Stephens and Co, Swiss Bank Corp, Bank America Corp and NationsBank Corp. Investment banks were considered favorite buyout targets as it allows banks to acquire an equity underwriting capability. However, Wells Fargo and Co's acquisition of First Interstate Bancorp illustrates the pitfalls of a takeover due to customer service and computer problems. In addition, a study made by Keefe, Bruyette and Woods Inc revealed the under-performance of buying firms after merger deals have ben consummated.

Economic aspects

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