Citigroup and Wells Fargo Eye Regional Banks Amid Eased Regulations

Citigroup and Wells Fargo have a window of opportunity to acquire large regional banks due to their deposit bases. According to CNBC, both banks are within the U.S. cap of 10% of national deposits, allowing them to potentially acquire lenders with assets exceeding $100 billion.

The regulatory easing has sparked interest in potential deals among investment bankers and investors. JPMorgan Chase and Bank of America are excluded from making such acquisitions as they already hold more than 10% of national deposits.

CNBC identified five regional banks that could be suitable targets for Citigroup: Fifth Third, Huntington, Citizens, KeyCorp, and Regions. Additionally, Zions may be an option for Wells Fargo due to its client relationships in fast-growing western states. First Horizon is another potential target for Citigroup as it has a presence in the U.S. Sunbelt.

A large acquisition could expand Citigroup's access to cheaper funding through additional branches. However, bank profits and share prices are rising, making it more difficult for sellers to agree to deals.