PNC Buys BBVA’s US Arm For $11.6BN In 2nd-Biggest Banking Deal Since Collapse Of Lehman

With the Fed expected to continue suppressing lending margins for the foreseeable future, the slow creep of consolidation in the banking industry continued Monday morning when Pittsburgh-based PNC Financial announced that it had agreed to buy the US business of Spanish banking giant BBVA for $11.6 billion.

According to Reuters, the deal is the second-biggest banking-sector deal since the collapse of Lehman Brothers. The combined bank will have nearly $560 billion of assets and operate in more than two dozen states.

The move underscores how a loosening of financial regulations and lowering of corporate taxes under President Donald Trump has emboldened regional lenders to try and compete with JPM by joining forces with other smaller rivals. Monday’s deal appears to be the first major banking deal in the US since the combination of BB&T and SunTrust in February 2019. That deal created the infamously-named Truist Financial. The combined PNC-BBVA lender will be America’s 5th largest, compared with 6th-place Truist.

The deal was long-awaited, and terms look reasonable, according to analysts at Jefferies analysts. The question now is how the combined entity will deploy its capital.