A merger can create a stronger business entity with much more market power. Intramarket mergers usually involve the consolidation of back office and branch closings in developing existing service territories. These mega mergers impact consumers, business, and regulators because it reduces competition which could result in higher fees to customers. These mergers offer many clues as to how banks will conduct business in the future. Banks that merge with different types of financial service firms could offer cross-market products or enter new markets with less investment risk through a merger.
Banks can learn about new markets and different customers for similar types of financial services.
These mergers could lock up consumer dollars and result in fewer choices. However, a major benefit for customers is one-stop shopping in which customers could conduct all types of financial services from one establishment. There are two main reasons for the increase is higher net interest income and higher noninterest income. The former is primarily due to a booming economy in which housing has become the main contributor to this rise of earnings. The latter is due to an increase in the price of many banking fees which are somewhat price inelastic.