Announced in February 2019, the merger between BB&T and SunTrust Banks had been taken up to create the sixth-largest bank in the US on the basis of assets and deposits
SunTrust to merge with BB&T in a deal worth around $66bn. Photo: courtesy of Ildar Sagdejev (Specious)/Wikipedia.org.
The US Federal Reserve Board has conditionally approved North Carolina-based BB&T’s $66bn merger with rival bank holding company SunTrust Banks to create a new entity called Truist.
The board said that BB&T should sell 30 branches and also offload more than $2.4bn in deposits to mitigate the competitive impact created by the proposed merger. Apart from that, the board has listed several actions to be taken up by the parties to complete the transaction.
The Federal Reserve Board has also issued a consent order against SunTrust Banks for unfair and deceptive practices. The board has charged the Atlanta-based bank holding company of misleading or making inaccurate statements between 2013 and 2017 to certain business customers regarding the operation and billing for some add-on products.
The board said that the company had previously cancelled the practices and, since 2016, has repaid nearly $8.8m in fees to customers. The Federal Reserve Board said that BB&T has committed that the new bank holding company – Truist will comply with the enforcement action as a condition for the approval.
The board said that it will not put up any objections to the updated capital plan filed by BB&T to reflect the merger.
BB&T and SunTrust Banks set to create sixth-largest bank in the US
Announced in February 2019, the merger between BB&T and SunTrust Banks had been taken up to create the sixth-largest bank in the US on the basis of assets and deposits.
Truist will be based in Charlotte, North Carolina, and will serve more than 10 million households in the US. At the time of announcing the deal, BB&T said that the enlarged bank holding company will have nearly $442bn in assets, $301bn in loans, and $324bn in deposits.
In another development, the BB&T, SunTrust Banks merger has secured approval from the Federal Deposit Insurance Corporation. Subject to pending satisfaction of customary closing conditions, the merger is expected to be closed in the first week of December 2019.
BB&T chairman and CEO Kelly King, who is set to become the chairman and CEO of Truist, said: “We are pleased to have received regulatory approval to merge two strong companies with complementary business models and a high level of cultural alignment. We’ll be even better together for our clients, teammates, communities and shareholders.”