Financial Institutions Reassess Divestment Strategy Following Regulatory Overhaul, Finds Ernst & Young Transaction Advisory Services ; Industry Challenges Brings New Strategic Planning and Execution Considerations to the Foreground

Summary

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NEW YORK, Nov. 2, 2010 /PRNewswire/ -- Financial institutions are pausing to reassess their operations and the impact of regulatory reform before attempting to raise cash or dispose of non-performing assets, according to a new report released by Ernst & Young LLP's Transaction Advisory Services practice. The report, Transaction trends: Divestitures and tax free spins: focus on divestiture, (available at http://www.ey.com/Publication/vwLUAssets/ Transaction_Trends_Divestitures_Financial_Services_Fall_2010/$FILE/ Transaction_Trends_Divestitures_Financial_Services_Fall_2010.pdf), finds that following the US's recent overhaul of its financial regulatory regime, the industry is going through a transformation and financial services companies are rethinking how they plan for and execute divestitures.

"Regulatory uncertainty will likely continue to affect M&A activity in the near term as financial companies continue to reassess and refocus their businesses while attempting to build capital positions," said Nadine Mirchandani, Partner at Ernst & Young LLP Transaction Advisory Services. "Carve-outs and other transactions in the financial services sector may increase and be much more targeted."

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Financial Institutions Reassess Divestment Strategy Following Regulatory Overhaul, Finds Ernst & Young Transaction Advisory Services ; Industry Challenges Brings New Strategic Planning and Execution Considerations to the Foreground

Regulatory considerations

The sweeping overhaul of US financial regulation that went into effect on 21 July 2010 will have an impact on financial institutions, as divestitures become increasingly complex and time- consuming. Many firms, in...

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