"Confidence was so shattered that banks were holding vast unlent sums, and businesses did not want to invest in new capital even though interest rates were at abnormally low levels…The general loss in confidence was the main cause of the low demand, and thus the low level of employment."

Prosperity Bancshares Inc. in Houston has struck another deal in Texas, announcing Monday that it would buy American State Financial Corp. in Lubbock for about $528 million in cash and stock.

LONDON - HSBC Holdings PLC Monday posted a 2011 net profit of $16.8 billion, boosted by a strong commercial banking performance and accounting gains on its own debt that helped offset weaker investment banking returns.

Revenue at M&T's big acquisition remains steady but profits are not as strong as some expected nine months later.

Nearly two years after receiving a $200 million infusion from a group led by WL Ross & Co. to execute a roll-up strategy in the Midwest, Talmer Bancorp has received a second serving of capital to help it bankroll further deals.

Two banks failed on Friday, with the Federal Deposit Insurance Corp. only finding a buyer for one of the fallen institutions.

Schaller Equity Partners discloses plans to nominate five directors, escalating a nearly yearlong battle with the small Floyd, Va., banking company.

The Federal Deposit Insurance Corp. issued prompt corrective actions against five banks in January, telling them to either raise capital or be acquired by another institution.

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Citizens Financial Group Inc. in Providence, R.I., posted strong earnings growth in the fourth quarter, but not nearly strong enough to offset losses at its parent company, Royal Bank of Scotland.

Citigroup disclosed Friday that the value of its share of the retail-brokerage joint venture with Morgan Stanley — Morgan Stanley Smith Barney — might be impaired.

Demand is outpacing supply in the leveraged loan market, which means issuers are obtaining less costly credit at the expense of investors in the loans. However, the tide is poised to turn, perhaps in the second half of the year.

Atlantic Coast Financial Corp. in Jacksonville, Fla., reported a loss of $4 million in the fourth quarter, compared with a loss of $5.2 million a year earlier, as its expenses and loan-loss provision declined.

Citigroup Inc. Friday sold its entire stake in Indian mortgage lender Housing Development Finance Corp. for $1.9 billion that will likely help the U.S. banking giant improve its capital to meet strict international rules.

Strong fourth-quarter earnings for French terminal maker Ingenico signal good news for the payments industry, and likely for Europe's economy overall.

The sovereign debt crisis affects all of us, whether we're managing risk at a trillion-dollar bank in North America or at Main Street Bank in Small Town, USA. Even if we don't have customers overseas, our customers at home may be affected either directly or indirectly by events on the other side of the Atlantic.

With few banks over $1 billion of assets willing to sell, larger buyers resort to picking off clusters of smaller banks. Pressure to grow outweighs the added costs, executives say.

Reading "Capital One Is Nearly Unscathed in Deal Victory" reminded me of watching ING Direct CEO Arkadi Kuhlmann address a major banking conference several years ago. He presented a detailed description of his unconventional approach to consumer banking and explained how each facet contributed to the success of the initiative.

Bank deal activity eventually has to increase, but predicting the exact timing of consolidation remains hard, says Thomas Michaud, the investment bank's chief.

Citigroup signaled Thursday that it plans to sell its almost 10% stake in Housing Development Finance Corp., a major Indian lender, in a move that could raise $2.1 billion for the New York banking giant.