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In spite of some of the recent positive bank earnings reports, the market has already made a judgment: America’s banks are worth only about their combined book value, having traded at nearly a 40% premium at the start of the year. The likely result of their low valuations, combined with a landscape in which size matters, is a tried-and-tested response to banking crises over the past four decades: consolidation.
The trouble facing many of America’s banks is coming into sharp relief. After the failures of Silicon Valley Bank (svb) and Signature Bank in March, behemoths such as JPMorgan Chase and Bank of America attracted deposits despite paying minimal interest, according to earnings reports released since April 14th. Many small and medium-sized banks, by contrast, face increasing competition for customers and rising funding costs.
https://www.economist.com/leaders/2023/04/20/why-america-will-soon-see-a-wave-of-bank-mergers
