The stock market was having a strong day Monday after yet another round of positive coronavirus vaccine data was announced. And just like we saw last week with the initial data from Pfizer (NYSE:PFE), the financial sector is one of the best performers.
Even so, Banco Bilbao Vizcaya Argentaria (NYSE:BBVA), better known as BBVA to most investors, was a particular standout. As of 10:40 a.m. EST on Monday, the stock of the Spain-based bank was up by more than 16%.
This may seem like a huge sum of money for just the North American arm of BBVA (whose total market cap is $29 billion), but this is a big business all by itself. BBVA USA Bancshares has $104 billion in assets and operates more than 630 branches in seven states. Once the merger is complete, the combined company will retain the PNC Bank name.
This merger is a win-win. It gives PNC a much larger presence in some key U.S. markets and could also give the bank some key efficiency benefits. And PNC's shareholders seem to agree: While it's quite common in these types of situations for the acquirer's stock to drop, PNC is higher by more than 3% after the announcement.
For BBVA, it gives the bank greater financial flexibility to reinvest in its European business. While there are still some regulatory hurdles that need to be cleared, both banks' boards have already approved the deal, and it is expected to close in mid-2021.