Magazine article American Banker

Biggest 100 Banks' Market Value Inches Up 0.8%

Magazine article American Banker

Biggest 100 Banks' Market Value Inches Up 0.8%

Article excerpt

The market value of the nation's 100 largest banks edged up a scant 0.77% during the second quarter, in sharp contrast to the breakneck growth rate of previous quarters.

The biggest reason for the slackened growth, most industry observers agreed, was the rash of low-premium mergers of equals that drained investors' enthusiasm for bank stocks, along with elevated fears of fallout from Asia's economic shakeout.

At June 30, the 100 largest banking companies had an aggregate market capitalization of $959 billion. NationsBank Corp. was again the nation's No. 1 banking company in market value, at $73.8 billion. (Complete table on page 25).

"A tremendous amount of money has been poured into bank stocks over the past couple of years anticipating easy gains on consolidation," said Lawrence W. Cohn, research director at Ryan, Beck & Co., Livingston, N.J.

"In the process, that money has driven bank stocks to a point where most acquirers are no longer willing, nor can they afford, to pay substantial premiums over market," he said. "So you had a series of transactions done with no premiums. Not surprisingly, that has been no fun for investors, and money has left the group."

In a notable example, the market value of First Chicago NBD Corp., which announced April 13 it would sell to Banc One Corp., slipped 1.31%, to $25.4 billion. Banc One's own valuation fell 3.75%, to $39 billion.

Market capitalization shrank during the quarter at numerous banks viewed as likely takeover targets. The value of PNC Bank Corp., Pittsburgh, fell by $2.4 billion, or 12.8%, to $16 billion.

Similarly, Crestar Financial Corp., Richmond, Va., skidded 7.7%, to $5.5 billion, and Huntington Bancshares, Columbus, Ohio, declined 7.5%, to $6.4 billion.

Concerns about Asia's economic anguish also cast a pall over much of the quarter. Among the most internationally oriented institutions, New York's J. …

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