PNC Financial Services Group's appetite for bank acquisitions remains robust, but its chief executive has little confidence that regulators would approve any deals in a timely fashion.
Given a spate of approval delays this year in the wake of President
"I think there's a bunch of financially attractive deals that everybody would love. I just don't think they'll ever get approved," Demchak said during remarks at the Goldman Sachs financial services conference.
"To go through the effort for a smaller deal and just be hung up with one-year, years-plus approvals with no rules, I think we have to wait."
After closing its $11.6 billion
PNC, a $559.5 billion-asset company based in Pittsburgh, has proved its ability to integrate a large bank and could repeat this "over and over again," Demchak argued. But he also said: "I don't think regulators would be open to us."
Biden's call for more thorough regulatory scrutiny of deals delayed several closings and contributed to a
Other factors in the slowdown, according to Thompson, include the spike in inflation that followed Russia's invasion of Ukraine in February — a development that galvanized Federal Reserve policymakers to ratchet up interest rates to rein in soaring prices.
Worries about a
Banks
Raymond James also examined the number of announced acquisitions in 2022 through the third quarter as a percentage of the total number of U.S. banks at the beginning of the year. This year's rate of 3.40% was on pace to be the second lowest since 2012, when the rate was 3.36%. The rate was 2.28% in the pandemic-plagued 2020, but the levels recorded between 2014 and 2019 ranged from 4.08 to 5.03%.
Christopher Gorman, chairman and CEO of KeyCorp in Cleveland, amplified Demchak's concerns about the M&A environment.
In addition to regulatory challenges, economic uncertainty makes it difficult to assess potential acquisition targets, Gorman said. It is "very challenging to figure out what's actually in their book," he said Tuesday in comments at the Goldman Sachs conference.
KeyCorp's last major bank acquisition came in 2016, when it bought First Niagara Financial Group in Buffalo, New York, for
"Right now is not a time that I personally would be interested in buying a depository," Gorman said.