In a move to compete with the larger tier of banks, BB&T will acquire SunTrust Bank in the largest banking merger in a decade. In the press release discussing the deal, management was focused on cutting costs by closing brick and mortar locations, while putting increased funding into the combined bank’s digital operations. Bloomberg’s Hannah Levitt reports:
Industry executives have long predicted a wave of bank mergers that until Thursday had played out only in smaller or midsize deals. Brian Moynihan, chief executive officer of Bank of America Corp., said last month he could envision the creation of another megabank, given the large number of small players spread through the country. And Ernst & Young said it expects a flurry of transactions this year, fueled by easing regulations and the U.S. tax overhaul, which helped lenders build a war chest to spend on acquiring new clients and technology.
The banks said the deal will allow more investment in technology while cutting more than 10 percent of combined total expenses through eliminating duplicate branches and digital systems. The company will create an “Innovation and Technology Center” in its new headquarters, and the statement on the deal used the words technology, digital and innovation more than a dozen times.
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