The wave of bank mergers this summer has heightened speculation about which big bank will be the next to sell. In this issue, Management Strategies joins the speculation by publishing a list of 10 large banks that could go on the auction block in the next 12 months.
It's not difficult to identify banks with lagging financial performance or those that face slower revenue growth in the next year or two. But it is hard to gauge the more subjective factors. Does management want to avoid selling? Will an announced downsizing program sufficiently reduce expenses, satisfy investors, and provide for long term growth that could preserve independence? In a potential merger of equals, will the chief executives of both banks be satisfied with their job titles and succession plans?
Henry J. Coffey Jr., an analyst with J.C. Bradford, noted that there is another element that can't be ignored. Acquiring banks, he said, often like to make what he calls "trophy" deals involving a well-known bank in a good market.