Dick Bove predicts an explosion of M&A deals in the banking sector, once we’ve cleared November. Basically, banks are cheap, growth opportunities are scarce, and regulation will favour a release of pent-up M&A demand:
“That’s when the capital rules are supposed to be set for the sector… As a result, there’s a whole bunch of banks that are selling at significant discounts to their book value…perhaps 50 per cent of them will be bought out within the next 12 months.”
“If you think the outlook for your industry is not particularly good, in other words, internal earnings growth is going to be weak for the second quarter—and if you have a lot of cash and capital—then you have to make acquisitions and they will,”
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