Jim Cleave, chief executive of both Marine Midland and HSBC Americas, said the acquisition of First Federal from the Toronto-based Canada Trust Financial Services group would turn Marine Midland into a bank with almost $30bn of assets - big
enough to expand further. "We are growing in the US rather than even considering getting out," he said.
A stream of mergers and failures has slashed the number of banks in the US by a third over the last 10 years, but more than 9,800 separate institutions still survive. As legal
barriers to mergers between banks in different states are removed, consolidation is likely to accelerate.
Many foreign banks, including First Federal's parent, CT Financial and the UK's National Westminster, have concluded that the price of staying competitive in the US is too high.
Edmund Clark, president of Canada Trust, said he had weighed Marine Midland's offer against the additional investment that would have been needed to achieve market
dominance. "We determined we were a seller, not a buyer, at today's prices," he said.
However, Cleave said that once it had digested First Federal, Marine Midland would look for more acquisitions in New York and neighbouring states. "We as a group will continue to look for opportunities to grow," he said.
