N.C. companies hoist sales for inner and outer banks.

AuthorRichter, Chris
PositionBANKING

North Carolina's two largest banks went shopping last year, but their sexiest deals weren't for full-service banks like themselves. In October, Charlotte-based Wachovia paid $25.5 billion for Oakland, Calif.-based Golden West, a savings bank that specializes in home-mortgage loans. Wachovia added $62 billion in deposits and 285 branches and entered states it has targeted for expansion, including California. Charlotte-based Bank of America announced in November that it will pay $3.3 billion for New York-based U.S. Trust, part of San Francisco-based Charles Schwab. U.S. Trust will make BofA the nation's top private-wealth manager when the deal closes in March.

Though Winston-Salem-based BB & T, the third-largest bank in the state, didn't close a big deal last year, there could be one in its future. To survive and remain relevant among the behemoths, CEO John Allison says, the bank needs to merge with a like-sized bank within five to 10 years. It has talked about expanding into the Washington, D.C., metro area, Georgia and Florida.

Expect Wachovia to expand its businesses outside traditional banking. BofA is likely to look overseas because, with the purchase early last year of Wilmington, Del.-based MBNA, it hit the 10% cap on U.S. deposits gained through acquisition. It has a toehold in China, having spent $3 billion in 2005 to buy 9% of that country's second-largest bank, China Construction Bank. CEO Ken Lewis has said he isn't very interested in Europe--growth is too slow there--but analysts say BofA has been eyeing London-based Barclays Bank.

Growth in the Triangle is coming largely from outside players. RBC Centura Banks, based in Raleigh but part of Toronto-based Royal Bank of Canada, has been among the state's most acquisitive banks. In early November, it agreed to buy 39 branches in Alabama from Birmingham, Ala.-based AmSouth Bancorp for an undisclosed sum. That came three months after a $456 million agreement to buy Atlanta-based Flag Financial. And it broke ground on a downtown Raleigh headquarters in September, calming fears that it might move out of state.

Boston-based Fidelity Investments announced in August that it will build a $100 million office complex in Research Triangle Park and create 2,000 jobs. The company already employs about 1,000 in North Carolina. And Switzerland-based Credit Suisse will spend $40 million to expand its office in RTP and add 400 jobs, doubling its work force there.

No homegrown bank has said it will...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT