Banks are on pace this year to merge at a level not seen since the 2008 financial crisis, the Wall Street Journal reported. It is a sharp turnaround from last year, when the economy spiraled and many regional and community banks put merger plans on the shelf. Bank executives are now feeling more certain about what the future holds, but some are finding it hard to make it on their own. Though the economy has in many ways recovered from 2020, loan demand is still low and profits from lending are slim. Banks have announced more than $54 billion in deals through late September, according to Dealogic. That puts industry mergers and acquisitions on pace for their biggest year since 2008, when some big banks had to sell themselves to stave off collapse. At this time last year, banks had announced just $17 billion in mergers. Banks typically spend weeks or months turning a potential target’s loan book upside down, searching for risky loans or other red flags, before agreeing to acquire it. But the COVID-19 pandemic muddied that process. For months, lenders struggled to assess the creditworthiness of their own customers, much less those of their competitors.
