There were no new banks created in the US in 2011, making it the first year in decades that the country has gone without the establishment of a single start-up lender.
The lack of new or de novo banks underscores the rapidly shifting business environment for US financials and changed attitudes towards the industry after the recent crisis.
A de novo bank is a freshly chartered bank that has not been created through the takeover of an existing institution.
But none of the three new banking charters reported by the US Federal Deposit Insurance Corporation for 2011 were de novos. That is compared with three de novo banks reported in 2010.
“These new banks [chartered in 2011] are takeovers of failed banks,” said Richard Bove at Rochdale Securities. “The question is has any one just come and opened up a new bank? The answer is no.”
The FDIC compiles data on new bank charters handed out to savings institutions and commercial banks, but does not split out which are de novo, making them difficult to track. However, analysis by the Financial Times shows that 2011 was the first year without a de novo bank since at least 1984.
“The number of de novos has been trending down for a few years. There’s a pipeline effect – somewhere between one or two years,” said one analyst. “The lack of de novos now is probably a reflection of public attitudes in 2008.” Other analysts say the still-challenging operating environment for US financials is deterring banking start-ups.
Source: Financial Times | Tracy Alloway in New York