As the revenue drought drags on in retail banking, regional players are facing growing pressure for another major round of merger-based consolidation. Based on a recent Novantas analysis of the entire U.S. branch system, about 16,000 outlets, or about 18 percent of the total, will either need to be closed or reworked over the next three years. Traditional merger models, however, will be only partially useful in meeting this challenge. To justify takeover premiums, in-market acquirers typically rely on back office and branch combinations for cost savings, while also looking for pricing power as they bulk up in local markets....
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Kevin Travis is a partner in the New York office of Novantas, LLC, a management consultancy.