Over the year, plenty of banks in the United States and the world have joined hands to create megabanks, in order to create enormous economies of scale. In this regard, it is perhaps important to point out that the onset of the banking meltdown in 2008 is also an important reason behind the readiness with which banks merge nowadays. The merger between Atlanta’s biggest bank SunTrust and North Carolina based BB&T had been in the world for some time, and on Wednesday, the banks announced that everything had been agreed with regards to the merger.
The merged entity is going to be known as the Truist Bank and will continue to be Atlanta’s biggest outfit. In this regard, it is important to note that the parent company will be known as Truist Bank, but even after the merger goes through, the two banks are going to be known by their original names for two years. BB&T and SunTrust are two of the longest-serving established banking institutions in the South, and their merger is almost certainly going to open up a lot of value for both banks. It is believed that the merger will help the banks save around $1.6 billion costs a year within the next three years and a part of that will constitute job cuts as well as combining departments that are engaged in the same line of business.
The Chief Executive Officer of BB&T, however, cautioned that the entire process of the merger can take around a year and hence, for now, the banks will continue to operate in the same vein. However, the name Truist Bank for the merged entity has attracted criticism from certain quarters. The founder of a branding firm stated that marketing the new entity could be a marketing challenge for the banks two years down the line. He said,
Strategically, the name falls flat.‘Trust’ is a baseline attribute for a bank. It is the absolute minimum requirement. A brand’s story should be more aspirational – providing an opportunity to tell a differentiating, interesting, and compelling story.