11.16.20 - PNC is spending billions to earn its spot among America's largest banks and financial institutions. The Pittsburgh-based commercial bank is buying the American unit of Spanish financial group BBVA for $11.6 billion, the two companies recently announced.
The deal is the second-biggest banking sector merger since the global financial crisis, after the massive $66 billion agreement in 2019 between BB&T and SunTrust to create Truist. Once the deal closes, PNC will have more than $560 billion in assets, making it the fifth largest retail bank in the United States – just behind JPMorgan Chase, Bank of America, Wells Fargo and Citigroup. Shares in BBVA surged more than 16% in Madrid.
PNC said in their statement that the transaction "significantly accelerates" its expansion strategy across the nation. BBVA's US subsidiary has over $100 billion in assets, and operates more than 630 branches in Texas, Alabama, Arizona, California, Florida, Colorado and New Mexico.
The deal comes amid a trying year for US banks, which have set aside billions of dollars to cover bad debts arising from the coronavirus recession. Many analysts have expressed caution that the US economy could shrink again in the fourth quarter, highlighting the risks facing lenders and banks.
Source: Financial Times