How will the BB&T and SunTrust merger impact Charlotte
Driven by collective need to invest in technology and build enough scale to compete with larger competitors, the merger signals a significant employment boost for Charlotte.
BB&T (NYSE: BBT) and SunTrust (NYSE: STI) announced a merger that will form the nation’s sixth largest bank. This $66 billion all-stock deal is expected to close in the fourth quarter of 2019 after federal approval. Driven by collective need to invest in technology and build enough scale to compete with larger competitors, the merger signals a significant employment boost for Charlotte.
The merged bank will be headquartered in Charlotte, North Carolina, where BB&T and SunTrust currently have a combined 2,000 total employees. Many of the existing jobs are in branches and are redundant given duplicative branch networks. In other words, this is a major job announcement very likely adding more than 10,000 new jobs to the Charlotte market.
Catalysts for Deal
Both BB&T and SunTrust have grappled with dated branch networks and inferior consumer technology compared to nationally chartered banks.
The combination is expected to realize $1.6 billion in synergies while giving the new entity more resources to invest in technology and hire financial technology specialists.
A wave of job announcements focused around theme of financial technology and innovation including AvidXchange (1,200 job expansion, Dec. 2018), Barings (600 new jobs) and Dimensional Fund Advisors (200 new jobs).
“Traditional investment [centers] such as New York, Boston and San Francisco are losing ground to smaller cities, including Denver, Atlanta and Charlotte.” – Financial Times (March 2, 2019)
In conclusion, the new bank resulting from the BB&T and SunTrust merger will be headquartered in Charlotte, solidifying the "Queen City’s" position as the second-largest banking center in the U.S. In turn, an estimated 13,600 jobs will be injected into the heart of the city, bolstering the already booming commercial real estate market.
