Tweet
Just heard on the news that Capital One just bought Chevy Chas Bank
Capital One and Citigroup have each held discussions to buy Chevy Chase Bank, one of the largest and best-known banks in the Washington region, according to sources familiar with the matter.
For both Capital One and Citigroup, privately owned Chevy Chase represents a potential source of deposits at a time when financial institutions are hungry for cash. McLean-based Capital One has bought two regional banks in recent years, helping fund its massive credit card business.
"It's about deposits and picking up branches," said Mike Tarsala, a managing analyst for Thomson Reuters. He added that Washington is an attractive area for acquisitions because it is affluent and has not suffered major declines in housing.
Spokesmen for Bethesda-based Chevy Chase Bank, owned by the B.F. Saul family, and Capital One said the companies would not comment. A Chevy Chase spokesman last week said the company did not comment on "rumors" about the interest of other banks seeking to acquire Chevy Chase. Sources on the talks spoke on condition of anonymity because discussions were private.
Major national banks these days are hungry for regional banks with a strong deposit base because those deposits are a more secure source of funds than loans from hedge funds or other banks. Many financial institutions have been hit hard by the credit crisis and are struggling to maintain their levels of cash.
"Everyone is looking for stable funding these days," said Scott Valentin, a managing director and bank analyst at FBR Capital Markets. "Because the capital markets are closed, deposits are the only game in town."
Valentin said he believes TD Ameritrade, SunTrust Banks, J.P. Morgan Chase and BB&T are interested in purchasing Chevy Chase Bank.
I've also learned that people are pulling their money out of their banks storing them in safes in their homes.
Comment