Federal Bank Regulators approved the amalgamation of SunTrust Banks, Inc. (NYSE:STI) with BB&T Corporation (NYSE:BBT) and makes way for the creation of sixth-biggest bank in the nation. Following the merger, SunTrust would retain the corporate and investment banking division.
CEO of BB&T welcomes merger
The merged entity – Truist Financial Corp will be situated in Charlotte. According to a news release from the banks, the merger would be completed by December 6, 2019. Kelly King, Chief Executive Officer and Chairman of BB&T, said the bank is excited to receive approval from the Federal Deposit Insurance Corporation and the Federal Reserve System’s board of governors for the merger of two strong firms. Kelly would take two roles in Truist Bank.
SunTrust is the largest bank in Georgia
SunTrust is a significant bank in Georgia. It is the second with more number of branches and occupies a number one slot in holding deposits in Metro Atlanta.
With a regional center in Atlanta station, BB&T holds the fourth position in terms of overall deposits.
Expects to achieve cost savings of $1.6 billion
The merger of the two largest banks expects to achieve cost savings of $1.6 billion by the year 2022. Some staff would lose their jobs, and closure of a few branches is not ruled out after the amalgamation of two larger banks.
Following the merger, the customers of both the banks would continue to operate accounts through online, mobile apps and at their respective bank branches. The banks will service the payments of cards and checks as usual. Bill Rogers, Chief Executive Officer and Chairman of SunTrust, said the combined entity would ensure to offer a smooth experience for the customers.
The merged entity in the US would need to comply with an enforcement action enacted by the Fed for unfair practices of imposing customer fees during 2013 and 2017. Until the conclusion of the deal, the share repurchases are kept on hold.
SunTrust to divest 30 branches
SunTrust announced plans to divest thirty branches across Georgia, Virginia, and North Carolina to First Horizon National Corp. The bank expects to close the deal in early 2020 and subject to the receipt of regulatory nod.