Banks went on a buying spree after the last crisis, but this time is different, CEOs say
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This crisis finally might reveal some (targets) that might become available
TD CEO Bharat Masrani
Buying opportunities could emerge for a bank with a solid balance sheet. Toronto-Dominion Bank has been eyeing expansion in the U.S. Southeast and would consider a “good asset generator” if it were to become available, TD president and CEO Bharat Masrani said Wednesday.
“I think this crisis finally might reveal some that might become available…,” he added.
There are, however, a few factors that could bog down any deal. Foremost would be that the pandemic and its related uncertainty are ongoing. Expense control is increasing in importance again for the banks as well, and job cuts at some lendersare back on the table.
Furthermore, any acquisition would have to check the various boxes banks have for such large investments. Masrani said during his bank’s third-quarter conference call they would look at buying another bank, but only if that made sense.
Buying a new business is also just one of several investments a bank could make with excess cash.
“We always consider investments strategy first, strategy first, strategy first,” Bank of Montreal CEO Darryl White said on Wednesday.
Some lenders have been busy on the M&A front post-global financial crisis. Scotiabank has tried to sharpen its geographic focus by shedding businesses in non-key countries and adding them in more crucial markets. CEO Brian Porter said Wednesday they have a “strict prioritization framework” for investment.
Canadian Imperial Bank of Commerce has likewise done some deals, such as a US$5-billion acquisition in 2017 of Chicago-based PrivateBancorp Inc.
