That's right. Citigroup Inc. is in talks to buy Chevy Chase Bank FSB, but it is not alone in its interest for the troubled Bethesda, Md.-based regional bank, according to
The Wall Street Journal. But, does it matter? And will it help the troubled giant?
Continue reading below
Felix Salmon over at Portfolio says
no:
The problem is that Vikram Pandit gave himself altogether too much time
to get smaller, and then decided his best chance at salvation was to
get bigger -- by buying Wachovia. Now, it's too late: the die
has been cast. Will Citi buy Chevy Chase Bank? It really doesn't make
any difference either way.
True,
Chevy Chase Bank is no Wachovia Corp., but it is a regional player that
overlaps with Citigroup's branches, and it will give Citigroup a few more
deposits. Chevy Chase Bank operates more than 280 branches in the
mid-Atlantic
region with $14.9 billion in assets and $11.4 billion in deposits.
Besides having checking and saving accounts, the bank also carries loans
for homes, cars and commercial properties
.
It's an interesting choice and a smaller choice than many
analysts would have guessed. However, since Chevy Chase Bank was badly
banged up
by the real estate market, the bank could be had for a steal. Over the past
year, Chevy Chase did what Citi and many other banks were doing, which
is
divesting assets. The bank put the Lowes
Island golf club on the block, cut back hours at branches, gave up
its in-store banking relationship
with Giant Food to
PNC Financial Services, and sold off some assets and deposits to
Hampton Roads Bankshares Inc.
However, privately held Chevy Chase is too small to put Citigroup back on the map as being the largest bank in the U.S., so if Citigroup doesn't win out in the bidding for Chevy Chase it probably won't be a huge upset like Wachovia was. However, the potential deal has prompted Google and Yahoo! message board chatter running from the serious to the absurd:
Do you have any thoughts on rumors that Citigroup could acquire Chevy Chase? Leave your comment below.
- Maria WoehrSee related speculation about Citi buying RBS' U.S. bank Citizens from Dealscape
Comments
This is not true. Chevy Chase is far from trouble. It's privately owned and very profitable.