Blog — 12 Sep, 2023
Insight Weekly: Bank mergers of equals return; energy tops S&P 500; green bond sales to rise
By Sarah Cottle
Today is Tuesday, September 12, 2023, and here’s your weekly selection of essential intelligence on financial markets and the global economy from S&P Global Market Intelligence. Subscribe to be notified of each new Insight Weekly.
In this edition of Insight Weekly, we take a close look at dealmaking activity in the US banking sector. After hitting a five-year low in 2022, US bank merger of equals (MOE) activity has bounced back this year as lenders increasingly view such deals as an attractive alternative to pair up and gain scale. MOEs make up 6% of all US bank M&A activity in 2023 through Aug. 28, higher than the last two years, according to S&P Global Market Intelligence data. The four MOEs announced so far this year represent a combined total deal value of about $659.5 million, or 25% of total deal value through Aug. 28. Meanwhile, the number of bank purchases by credit unions has increased to 10, moving closer to last year's record total of 14 such deals, excluding terminated transactions. Half of this year's deals were announced in the final week of August.
Energy closed the month of August as the only S&P 500 sector to log positive returns amid a general selloff among other industries. On the other end of the spectrum, utilities emerged as the worst-performing sector during the month. The S&P 500 Energy index notched a 1.8% gain during the month, while the S&P 500 Utilities index slid to the bottom of the list with a negative return of 6.2%. The broader S&P 500 index saw a negative return of 1.6%.
Global green bond sales are likely to accelerate further, helped by supportive policy in Europe and a more stable interest rate environment. The European Union Green Bond Standard is expected to be adopted later this year, boosting demand in the region that leads the world in green bond issuance. The new standard aims to improve the transparency, comparability and credibility of the green bond market, helping investors more closely assess the environmental, social and governance stance of issuers. European entities issued $87.67 billion of green bonds in the April-June quarter, up 30% on the previous three months, according to data from the nonprofit Climate Bonds Initiative.
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