Successful integrations

September 2012
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Successful integrations

At a glance

Merger and acquisition activity in consumer finance has increased due to regulatory scrutiny, higher capital costs, uncertainty over government sponsored entity (GSE) reform, and general market changes. Consumer finance companies should assess their integration plans while keeping the associated risks and opportunities top of mind.

Mergers and integrations in consumer finance companies

In late 2011 and into 2012, merger and acquisition (M&A) activity began to increase in the consumer finance industry due to several factors including:

  • Increased regulatory scrutiny driving up non-compliance risk and associated operational costs
  • New capital proposals for holders of mortgage assets and uncertainty over Government Sponsored Entity (GSE) reform
  • The future of the capital markets and changing nature of the industry landscape

The impact overall to changes in the market has resulted in several prominent firms exiting the industry with others currently pondering their future. With uncertainty and risk often comes opportunity and several players have used this period to acquire operations of companies exiting the business or to pursue growth through M&A activity.

This point-of-view will help companies to assess their integration plans and can help to provide leading practices and a framework to help prevent common pitfalls.