Potential M&A targets might not want to sell at what they consider a rock-bottom price; at the same time, potential bidders might lack confidence because of their own low valuations. In general, many banks still focus on deleveraging and cleaning up their balance sheets as a prerequisite to focusing on growth. This illustrates that consolidation cannot be the panacea.
Merging two weak banks will not magically produce one strong bank. Likewise, when a bank that is in good shape takes over a weaker one, this may not necessarily result in a strong institution, but could actually lead to a larger, less healthy bank. Structural inefficiencies are best dealt with at the level of the institution in which they originate.