[ by Melanie Gretchen ]

Analysts at Keefe Bruyette & Woods looked into their crysal balls to see what can be expected for 2013.  Mostly, there were some "oohs" and "aahs."  Finally someone stood up and essentially said that 2013 will be the year of financial mergers and acquisitions. 

For better or for worse, KBW analysts say consolidation will continue its steady march since the financial community.  Specifically, the firm predicts:

• the financial market should stabilize more, letting buyers and sellers get closer on asset prices;
• a deal will be reached on the Fiscal Cliff, hence the prediction for more stability.
• as profits continue to stagnate, the offers on the table should begin to look more attractive to sellers.
• banks that are behind in cost-cutting likely will to be sold now.

KBW's takeaway for 2013 goes something like this: 

"Therefore, the more efficient firms buying the less efficient banks will primarily drive consolidation., in our view. 

Outside of banks, we believe efficiency savings will also be a key driver and firms with lagging returns will become more realistic about pricing."

For further details, go to [WSJ, 12/7/12].