Analysis-Big bank deals stalled by Trump volatility even as officials signal deregulation

(Reuters) - Big banks are holding off on acquisitions and staying cautious about the Trump administration's pledges to unleash dealmaking, according to industry executives.
Treasury Secretary
"The slowdown in deals which we have seen has been caused by a whole host of things," said
While welcoming deregulatory signs, bankers and industry executives told Reuters that big mergers were stalled by market volatility, economic uncertainty, concerns about paper losses on banks' balance sheets, and the complexity of transactions among large, heavily regulated lenders.
"I'm less optimistic about M&A at the super regional level, I think that's still probably going to have a lot more scrutiny," which makes mergers of equals "unlikely," said Pate, whose firm manages
For larger banks, only a few big targets would make sense to expand their businesses, so executives are prepared to wait for the right deal to come along.
The Republican-led board of the
"The
"Productive and synergistic mergers are often slowed due to immaterial supervisory issues," Bessent said in a
SENTIMENT
The caution around deals contrasts with the excitement after President Trump's election in November. The expected deregulatory wave was forecast to make it easier for U.S. banks -- of which there are more than 4,500 -- to combine. While mergers still need to be reviewed, the new administration is doing away with some of the tougher guidelines set out last year.
Biden regulators' close scrutiny of combinations was bemoaned by industry executives who said it delayed transactions and discouraged new deals.
The
There have only been nine announced transactions worth more than
Industry executives cite
Regulators were reportedly reluctant to sign off on the merger amid concerns over TD's policing of customer transactions. In 2024, the bank paid over
UNCERTAINTY
The regulatory outlook is still in flux because agencies including the
Around two-thirds of large U.S. banks remain in the regulatory penalty box, as the Federal Reserve has deemed them to have unsatisfactory practices in areas ranging from governance structures to liquidity risk management, according to a recent report from law firm Wachtell, Lipton, Rosen & Katz.
Turmoil from the failures of
"There are still some obstacles," said
(Reporting by
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