Diamond Sees M&A Taking Out 3,000 US Banks in 2-3 Years

Watch Diamond Sees M&A Taking Out 3,000 US Banks in 2-3 Years - Bloomberg on Dailymotion

Transcript

00:00Today we have four and a half thousand banks. When you mention that to people that don't know,

00:04they go four and a half thousand banks in the United States. That's the wrong number. Well,

00:08it is the wrong number. And many of the smaller community banks are too small to succeed

00:13to get their return on equities back above 10 percent up to up to something more credible for

00:19their valuation and the ability to do in-state mergers. And with the support of the Treasury

00:26in the SEC in terms of approvals of these in the OCC, we think that there's going to be

00:32consolidation that takes that number of four and a half thousand to something closer to a thousand

00:36or fifteen hundred literally over the next two to three years. Do you have sorry? No. Do you have

00:42ideal tie ups? We have absolutely ideal tie ups. We're working on them right now and we can't say

00:47a thing about them. Give me a flavor of what you know what you think will happen, if not what you're

00:53looking at. So one of the best opportunities is for banks, say, in that 10 to 50 billion area,

00:59higher regulatory capital hits in at 100 billion. Most of the banks want to either stay below that

01:06or have a clear strategy approved by the regulators before they go over that.

01:11But there's tremendous opportunities for banks in that 10 to 50 billion area to acquire, you know,

01:17smaller community banks, typically more private, often in-state, where you think about the costs of

01:24technology come right out because almost all of these banks are on the same technology platform.

01:30The costs of regulatory relations. You've got duplicate departments that comes right out.

01:35So what we're seeing, Francine, is a is a opportunity to get really, really good returns just from the cost

01:43synergies to say nothing about the revenue synergies. And if you can do them in-state or close to state,

01:48those revenue synergies come even more quickly.