More than two in five bank leaders believe their institutions will buy another bank in 2025, suggesting a potential uptick in merger activity in the coming year, according to a new survey on M&A by Bank Director.
Forty-three percent of bank leaders said their institutions were very or somewhat likely to buy another bank next year, up from 35% a year earlier, Bank Director reported. As for the reasons, respondents cited scale to drive technology and other investments (43%) and geographic expansion (37%) as the two most important factors driving acquisition strategies. More than half of those considering acquisitions (55%) believe their bank’s stock is attractive enough to buy a target that meets their criteria.
The survey also found that deposit costs remain a concern, with 72% of all respondents citing it as a challenge to bank profitability. Forty percent cited concerns about regulatory compliance costs as another challenge. At the same time, more than a third pointed to an increased compliance burden as an obstacle to organic growth, up from 22% a year earlier, Bank Director reported.
