Did You Know Why The Banc Of California Is Not Spelled As 'Bank' In The US?

From HDFC Bank to the State Bank of India to the Bank of America, almost all banks across the world have one thing in common: It's the spelling of the term 'bank'. Surely you must have seen the spelling written as 'bank', right?

But is it the case for all banks across the world? Well, certainly not.

Why Banc Of California Is Not Spelled As 'Bank'

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For Banc of California, it's not a misspelling error, which is the reason behind it not having the otherwise common spelling of 'bank' in its name. It's actually a law due to which it can't have that.

The answer is pretty straight-forward, at least in the case of Banc of California. The California Financial Code states that in order to conduct business under a name that includes the word "bank," a firm must have received a certificate from the commissioner authorising it to engage in commercial, industrial, or trust banking businesses, as per a Bloomberg report. Holding companies like Banc of California own banks but do not themselves operate as one, so they must use the term 'banc' instead of bank.

Also, California isn¡¯t the only US state with such regulations; Ohio, Alabama, and Wisconsin have similar laws. Companies must also follow US federal regulations; for example, The Securities and Exchange Commission (SEC) prohibits a covered fund from using the word "bank" in its name. And firms doing business in countries like Canada and Australia must get consent from the national financial regulatory institution to call themselves banks, as the report mentioned.

Also Read: Explained: How Apple Is Becoming More Like A Bank

Banc Of California To Merge Soon In A 'Rare Deal'

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About three months after the world saw back-to-back bank collapses, Banc of California and PacWest Bancorp announced that they would come together and merge in an all-stock deal to create a bank with $36 billion in assets.

To help fund the combination, the lenders have also agreed to sell $400 million of new shares to private equity firms Warburg Pincus and Centerbridge Partners, as per a Reuters report.

The combined bank will have $25.3 billion in total loans and more than 70 branches in California. It will be based in Los Angeles and led by Banc of California CEO Jared Wolff. PacWest was among the lenders that were rocked by the collapse of three regional banks earlier this year, prompting the worst industry turmoil since the 2008 financial crisis.

The merger deal is also being termed a rare one. This is because it marks a rare transaction in the market after several months of government-negotiated sales of failed banks. Bank mergers have also been held up for months or scrapped pending regulatory approval.

After all, securing regulatory clearance for bank mergers on a timely basis has been a key concern in recent times. However, two sources familiar with the transaction said the announcement showed confidence among the parties in achieving the necessary sign-offs. The merger is reportedly expected to be completed by late 2023 or early 2024.

Also Read: How Coffee Giant Starbucks Also Works As An 'Unregulated' Bank

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