More NewsFurther Consolidation Predicted for US Banks

Further Consolidation Predicted for US Banks

A report by Financial Insights predicts continuing consolidation within the U.S. banking industry, which will result in the loss of 2,000 banks by 2014. This consolidation will affect all types of institutions, and their IT vendors, according to the report. By 2014, the largest U.S. bank may well be over $5 trillion in global assets, or four to five times the size of today’s Citigroup, said the research. The report found that the current state of the marketplace has created three mega institutions – Citigroup, JP Morgan Chase and Bank of America – that control their own destiny. ‘Banks are born to merge and acquire each other in order to sustain sufficient growth rates and profitability objectives,’ explained Bill Bradway, a group vice-president at Financial Insights. ‘Effective use of technology is essential to support this growth as well as produce the necessary product and delivery innovations that drive organic growth. History has shown time and again that banks that don’t get IT right become acquisition targets.’

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