PNC Advances $11.6B BBVA Record Purchase Deal

The second-biggest banking deal in the U.S. since the Great Recession is moving forward for $11.6 billion following weeks of talks between PNC and BBVA, according to a new Reuters report on Monday (Nov. 16). 

The all-cash deal gives PNC the U.S. unit of Spain-headquartered BBVA. The new combined bank will be the fifth-largest retail bank in the country, with a presence in 24 states and combined assets of almost $560 billion. 

PNC told Reuters that the deal has been approved by the boards of both companies and is expected to close by the middle of next year. It is expected to add roughly 21 percent to 2022 earnings. 

The Trump Administration reversed many of the tax changes that came with the 2008 financial crisis. Trump dropped corporate taxes, which made capital available for loans. In turn, regulators gave the green light to more regional bank mergers —Cadence Bancorp and State Bank Financial Corporation; Synovus Financial Corp’s and FCB Financial Holdings.

The 2019 $28 billion all-stock merger between BB&T Corp and SunTrust Banks to create Trust Financial Corp holds the record for the largest purchase deal since 2008.

PYMNTS reported on Sunday (Nov. 15) that talks between PNC and BBVA were advancing, per a Wall Street Journal (WSJ) report, which was updated Monday morning (Nov. 16).

The deal could give PNC an expanded footprint in the southeast and west regions in the country.

PNC has been considered one of the more likely contenders to help consolidate the broken-up U.S. banking sector, WSJ reported, having recently added fuel to that fire by becoming involved in a sale of its stake in BlackRock for $15 billion. That roped in funds that could be used for acquisitions.

Big bank mergers have been scarce in the past decade since the financial crisis of the late 2000s, but despite that rarity, regional lenders have felt the crunch from bigger rivals like J.P. Morgan Chase and Bank of America, which have been bringing in deposits through digital apps, marketing and nationwide branch networks, WSJ reported.

Shayan Khwaja, BBVA executive vice president and director of consumer lending, spoke with PYMNTS about the must-haves of the future, explaining more digital onboarding is needed alongside collaborations that show consumers more information about how they’re spending.

BBVA is one of several banks collaborating with Google to offer digital accounts.