RETAIL BANKING | Staff Reporter, Singapore

Weekly Global News Wrap Up: Middle East banks seal takeover deals worth $8b; Fed rejects countercyclical capital buffer

And Fifth Third Bancorp is set to buy MB Financial for $4.7b.

From Bloomberg: The top ranks of Middle East banking is changing. In the past week alone, lenders in Saudi Arabia and Dubai have agreed to takeover deals worth just over $8 billion. Saudi British Bank’s $5 billion all-stock deal to acquire Alawwal Bank last week will catapult the HSBC Holdings Plc-backed institution into one of the region’s top 10 lenders. Emirates NBD’s will add $37 billion of assets with the acquisition of Denizbank AS in Turkey. That narrows its gap with First Abu Dhabi Bank, which itself is the result of a merger between National Bank of Abu Dhabi and First Gulf Bank last year.

From Bloomberg: Those pushing to weigh the demand for billions of dollars in new capital which can bolster big banks against unforeseen market shocks haven’t persuaded the key agency staffers from the Federal Reserve, insider sources told Bloomberg. Prominent Fed leaders -- including one of the three current governors -- are arguing that the so-called countercyclical capital buffer could provide a vital safeguard against a sudden downturn. But officials in the trenches at the Fed and other agencies see current risks as too remote to justify using it. The buffer, which has never been used in the U.S., is meant to be activated when asset prices and credit are at risk of becoming overheated. 

From Reuters:  U.S. regional bank Fifth Third Bancorp has agreed to buy smaller rival MB Financial Inc in a stock-and-cash deal valued at about $4.7 billion, as it looks to expand in Chicago and broaden its middle market customer base. The merger will result in the combined entity having a total Chicago deposit market share of 6.5 percent, ranking it fourth in total deposits among the nearly 200 banks in the marketplace, Fifth Third said.

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