PricewaterhouseCoopers LLP said 2010 will probably be a repeat of last year for bank mergers and acquisitions, with federally assisted deals continuing to dominate the deal landscape.
"Such deals provide downside protection through loss-sharing agreements at a time when there is still significant uncertainty about credit costs," the New York professional services firm said in its annual financial services M&A outlook, issued Thursday.
Last year deal volume rose nearly 11% thanks to the flood of banks closed and sold by the Federal Deposit Insurance Corp. But there were virtually no large mergers, so the overall dollar value of bank deals plummeted to $6.4 billion, from $116.1 billion in 2008.
PWC said that trend may continue, since the FDIC has said it expects even more banks to fail in 2010 than last year, though deal values could creep up as even more banks and private-equity investors make plays for failed banks.