Banking Deals Catch Eye of Activist Investors Amid Deregulation

Relaxed rules in the U.S. around banking mergers have reportedly caught the eye of activist investors.

That’s according to a report Tuesday (Dec. 30) by The Wall Street Journal (WSJ), which said this uptick in interest comes amid a rebound in banking deals. As of early December, the value of bank deal activity had climbed to the highest level in four years, the report added, citing data from S&P Global Market Intelligence.

The report cites the example of Comerica, a Texas-based bank that put itself up for sale earlier this year, prodded by hedge fund HoldCo Asset Management.

HoldCo would eventually decide that it was unhappy with the deal for Fifth Third Bancorp to acquire Comerica, arguing that the bank should have considered other suitors.

Comerica, the WSJ added, remains committed to the deal, and Fifth Third’s CEO has said the bank is confident it will finalize the nearly $11 billion merger in early 2026.

Meanwhile, HoldCo has also campaigned for changes at other regional banks, with co-founders Vik Ghei and Misha Zaitzeff seeking additional targets.

“I would be shocked if there weren’t more Comericas,” Ghei said in an interview with The WSJ. He added that bank management teams and boards have long been “complacent, and I would even argue arrogant.”

Nathan Stovall, director of financial-institutions research at S&P Global Market Intelligence, told the WSJ that this is an unusual moment for activism in the banking sector. “You just haven’t seen campaigns like this,” he said.

The Comerica/Fifth Third deal, PYMNTS wrote earlier this year, moves the lender into the category of “super regional” banks, which typically have assets exceeding $100 billion, multiregional footprints, and can rival national banks in product lines, such as payments, wealth management and commercial lending.

The merger, the report added, closes the gap between regional players and the “Big Four” national banks: JPMorgan Chase, Bank of America, Wells Fargo and Citigroup.

“There are several trends shaping merger and acquisition (M&A) momentum,” PYMNTS added. “Fed Vice Chair Michelle Bowman’s comments have hinted at lighter oversight for smaller banks, which could open the door to faster consolidation.”

Indeed, this year has seen banking mergers get approved at their fastest rate in more than three decades. Per a Financial Times report last month, the average time to finalize a deal following its announcement has fallen to four months this year, the shortest since at least 1990. During the Biden administration the average approval time peaked at almost seven months.