Acquire or Be Acquired 2018
Andrew Frisbie, Managing Director, Novantas
Mike Jiwani, Director, Novantas
The scale imperative has never been greater in the banking industry as larger banks are reaping the benefits of digital presence and marketing heft to acquire an outsized share of consumer and commercial relationships. In the haste to find the right strategic partner, buyers should apply the same discipline to the deposit portfolio as they historically have to the lending book – particularly given the expectation for funding cost variances to expand as rates march upward. Assessing the target’s current surface-level financial metrics is a poor substitute for forecasting how the target bank’s funding base will react in different rate environments; a selection of such methodologies will be presented.