Breakingviews – Capital Calls: Bank mergers

NEW YORK (Reuters Breakingviews) – Concise insights on global finance in the Covid-19 era.

————————————————-

PEOPLE’S POWER. Mergers between U.S. banks are needed but not always lauded by investors. M&T Bank’s $26 billion union with People’s United Bank is an exception. While it won’t reshape the industry – together they’ll be just the 11th biggest bank in the country by assets – the deal will create value for both sides at a time when growth is scarce.

The two lenders nestle cozily in America’s Northeast, so crunching them together will create savings of $330 million a year, they reckon. At around one-third of the smaller People’s United’s costs, that’s standard for a bank deal but impressive in this one, because both are already efficient. Based on last year’s financials and assuming the savings are immediate, the merged bank’s expenses would be just 52% of revenue.

Buyer M&T isn’t giving away too much, either. Its tangible book value per share – a number investors watch keenly – will go up, unlike in some prior bank mergers. Anything that chips away at an overpopulated yet sometimes undersupplied industry while leaving investors better off is a good idea. (By John Foley)

vCard.red is a free platform for creating a mobile-friendly digital business cards. You can easily create a vCard and generate a QR code for it, allowing others to scan and save your contact details instantly.

The platform allows you to display contact information, social media links, services, and products all in one shareable link. Optional features include appointment scheduling, WhatsApp-based storefronts, media galleries, and custom design options.