Global M&A trends in financial services: 2026 outlook

Financial services dealmakers look for scale, cost-efficiency, and tech-driven transformation

High-value dealmaking in financial services accelerated over the past year, with an uptick in deals above $1bn and megadeals over $5bn, and we expect that momentum to continue in 2026. Across all financial services segments, key M&A themes remain the push for scale and cost efficiency to lift earnings and address increased competition, including from private credit. These pressures are spurring domestic consolidation, selective cross-border expansion, tech-driven transformation, and capability-led acquisitions. In some markets, changes in banking capital requirements, such as recent easing in the US and the UK, could support further M&A activities across the financial services sectors.

While the value of global financial services deals increased 25% in 2025 from 2024, transaction volumes increased by a more modest 4%. This confirms the increasing number of sizeable deals and megadeals. Nevertheless, this divergence between deal values and volumes reflects ongoing uncertainty around economic growth and the trajectory of interest rates, alongside concerns about asset quality in loan portfolios, and the effects of geopolitical shifts, including the impact of new tariff regimes. Even so, dealmakers are increasingly adapting to this new backdrop, using M&A as a strategic tool to reposition portfolios and shape future growth.

At a glance, we expect M&A activity in 2026 across the financial services sectors will be driven by the following trends:

Banks continue to consolidate, primarily within domestic and regional markets, while sharpening their focus on core businesses. Some are also pursuing acquisitions of insurers and asset managers and exploring partnerships with private credit funds. Payment providers will continue to attract M&A interest.
Insurers are reshaping their portfolios by exiting lower-return lines and doubling down on pensions and new digital business models. The separation of investment management businesses from the risk carriers is expected to continue. Investors’ focus on insurance brokerage rollups remains, although the pace is moderating in the US and in the UK as the strategy spreads to new markets, including Asia.
Asset and wealth managers are seeing an uptick in mergers among mid-tier firms looking to improve efficiency, expand distribution, and enhance access to private markets.

We are also seeing significant regional variance in deal activity, with signals of revitalised growth in Asia—particularly in China, India, and Japan—and in the US, where regional bank consolidation and recapitalisation remain key themes. The rebound in Europe has been more selective, focused primarily on Italy and the Nordic countries. The largest deals in recent months include Fifth Third Bancorp’s $10.9bn acquisition of Comerica and the $7.4bn take-private deal for Air Lease Corporation led by Sumitomo Corporation, SMBC Aviation Capital, Apollo and Brookfield.

‘The continuing megadeals in financial services are a reflection of the need for scale and tech-driven transformation, as well as an increasingly positive sentiment towards M&A. For 2026, we expect this trend to continue with a steady progression of deals, especially megadeals, depending on how geopolitics and the impacts around asset quality play out.’

Christopher Sur,Global Financial Services Deals Leader, PwC Germany

Spotlight on Private credit and M&A

The implications of private credit's growth for M&A

A common theme across banking and capital markets, insurance, and asset and wealth management (AWM) is the growth of private credit, which is disrupting traditional market norms and driving greater convergence between the sectors. An increasing portion of banking and capital markets deals in the US and Europe are being funded by these alternative funds. This shift is increasingly influencing deal rationale, buyer universes, and transaction structures across financial services.

Private credit represents a structural shift in financial services

In particular, private credit has grown very rapidly in the past decade to become an asset class with a size of $2tn and beyond in assets under management by funds globally, but its growth trajectory still has a long way to go. We view its growth as a potentially generational shift that is likely to create unique deal opportunities as it directly funds deals in different ways and take market share from traditional banking participants. Private credit thus presents a unique set of opportunities for the range of players in financial services, with important implications for M&A.

Credit funds rose to prominence in the aftermath of the 2008 financial crisis, filling the gap left as banks retreated. Initially concentrated in sponsor-backed direct lending, private credit has since expanded into a much broader array of strategies, with credit now flowing across retail, corporate, and structured lending markets. Total returns in private credit have outpaced those of banks, in part because these funds are not subject to the same capital requirements and regulatory constraints—although regulatory scrutiny continues to evolve. As a result, banks increasingly view private credit funds not only as competitors, but also as potential partners.

Where private credit is influencing M&A and deal strategy

First, growth in the number of direct lenders in M&A situations in the mid-market and for large-capitalisation companies continues and we expect this will support further growth in M&A across all sectors. Private credit is also innovating by providing preferred equity and other bespoke financing solutions to large corporates that have historically relied on public markets or traditional bank relationships.

Second, credit funds have become M&A targets as scaled asset managers and private capital firms look to add origination capability and deepen credit platforms. Recent deals include Franklin Templeton’s acquisition of European private credit firm Apera Asset Management, completed in October 2025, and Brookfield’s proposed purchase of the remaining approximately 26% interest in Oaktree announced in October 2025. We expect this theme to persist as buyers look to deepen private credit capabilities, demonstrate multi-asset-class strategies, and leverage credit capabilities across origination, structuring, and distribution.

Third, insurers’ allocations to credit funds have expanded in recent years. An alternative strategy is for insurers to set up or potentially acquire their own credit asset management capabilities. This approach enables them to deploy their own insurance balance sheets more directly while also raising third-party capital from limited partners. Recent examples include Manulife Investment Management’s acquisition of multi-sector alternative credit manager CQS, as well as Generali Investments’ acquisition of a 77% stake in MGG Investment Group and its affiliates through its wholly owned subsidiary, Conning & Company.

Finally, credit funds are increasingly partnering with banks to provide customers with structured finance solutions, recognising that collaboration can provide a faster and more efficient route to market. Recent examples include an agreement between Citigroup and Carlyle Group to exchange market intelligence and explore co-investment and financing opportunities, and the strategic partnership between UBS and General Atlantic, focused on private credit opportunities to enhance access to a broader set of direct lending and other credit products.

Strategic choices for banks, insurers and asset managers

As this private credit-driven convergence of asset management, insurance, and banking plays out, the opportunities outlined above are likely to accelerate while new ones emerge. Banks, insurers and asset managers will need to make clear strategic choices about how to position themselves to defend and grow their market share and create value.

Global M&A volumes and values in 2025

Global financial services M&A values rose by 25% in 2025, and deal volumes increased by a more modest 4%. Growth in deal value was largely attributable to an increase in the number of megadeals (transactions valued at greater than $5bn), which rose from 14 in 2024 to 21 in 2025. Of those 21 megadeals, 13 occurred in banking and capital markets, with asset and wealth management and insurance each accounting for four transactions.

Europe, the Middle East, and Africa (EMEA) recorded the largest year-over-year increase in deal value, up 86%, supported by several large banking and insurance transactions announced in Europe during the year. Deal values in the Americas rose by 9%, with regional banking and payments activity contributing to a 50% increase in banking and capital markets deal values. By contrast, a lower number of insurance megadeals in 2025 was the primary driver of a 27% decrease in deal value within the insurance sector. In Asia Pacific, deal values rose 12%, as the number of megadeals increased from two in 2024 to five in 2025.

Deal activity grew fastest in the Americas, with volumes increasing 7% year-over-year. EMEA deal volumes rose by 5%, and activity in Asia Pacific remained broadly flat.

Global M&A trends in financial services by subsector

Below we outline the key trends we expect to drive M&A activity across banking and capital markets, the insurance sector, and asset and wealth management in 2026.

We see five significant trends in banking and capital markets that are likely to shape deal activity in 2026: continued bank consolidation and strategic acquisitions, the blurring of traditional sector boundaries, a renewed focus on portfolio optimisation through loan portfolio and regional carveouts, the expanding role of alternative funds in financing transactions, and a shifting regulatory environment for capital requirements.

Consolidation and strategic expansion remain the primary M&A engine

Bank consolidation and strategic expansion remain key drivers of M&A supported not only by banks’ focus on scale, efficiency, and strengthening the customer base, but also by a gradually more accommodating regulatory backdrop in the US and UK, as we note below. Domestic banking M&A has been active in recent months. In the US, regional bank consolidation has continued with transactions such as Fifth Third Bancorp’s $10.9bn acquisition of Comerica, Pinnacle Financial Partners’ $8.6bn merger with Synovus Financial and Huntington Bancshares Incorporated’s $7.4bn acquisition of Cadence Bank, aiming to expand regional footprints with limited overlap. In Europe, consolidation has been most evident in Italy, where several domestic banking combinations continue to reshape the competitive landscape. While domestic or in-region transactions dominate, the market remains ripe for cross-border deals, and we are watching to see if that trend revives. In Asia Pacific, Japanese institutions have cumulatively invested more than $100bn in US financial services firms over the past decade; however, there have been no large bank acquisitions in the past year following a flurry of activity in 2023 and 2024, suggesting a near-term pause rather than a reversal in cross-border ambitions.

Convergence reshapes banking M&A strategy

Traditional sector boundaries within financial services continue to blur, as commercial banks increasingly pursue acquisitions of insurers and asset managers to diversify earnings and deepen client relationships. A recent example is BNP Paribas Cardif’s €5.1bn acquisition of AXA Investment Managers. This illustrates banks’ growing appetite for adjacent capabilities beyond core lending such as widening the range of traditional and alternative assets available to customers, expanding distribution networks, and enhancing innovation capabilities.

Divestitures and carve-outs as core strategic tools

Banks are increasingly pursuing loan portfolio sales and regional carveouts as they refocus on core markets and improve capital efficiency. An example of loan portfolio sales includes Atlantic Union Bankshares’s sale to Blackstone of an approximately $2bn commercial real estate loan portfolio. HSBC Continental Europe’s proposed sale of HSBC Bank Malta to CrediaBank, HSBC’s announced exit of its retail banking business in Sri Lanka, and other non-strategic activities illustrate how larger financial institutions are simultaneously divesting non-core positions and doubling down on priority growth areas.

Alternative capital redefines deal financing

Alternative funds are playing a greater role in banking and capital market transactions, particularly in the US and Europe, underscoring the growing influence of private capital as both a financing source and strategic partner. A recent example is GATX and Brookfield Infrastructure’s approximately $4.4bn acquisition of Wells Fargo’s rail operating lease portfolio through a newly formed joint venture which completed in January 2026. While this trend has yet to meaningfully extend to Asia, we believe it is only a matter of time until it does.

Regulatory shifts may create new M&A opportunities

The regulatory environment is shifting, and the past few months have seen significant changes in banking regulation across several jurisdictions, particularly with respect to the level of capital banks are required to hold.

In the US, the Federal Reserve has approved a reduction in the supplementary leverage ratio, which stipulates the amount of Tier 1 capital banks must hold against total leverage. In the UK, the Bank of England has reduced required Tier 1 capital from 14% to 13%. Meanwhile, regulators in the European Union, notably the European Central Bank, are considering changes to the capital framework, to simplify the different requirements and buffers banks currently need to comply with. On the other hand, the implementation of the Basel III final (Basel IV) reforms is expected to lead to higher capital requirements from 2028, largely necessitated by the expiry of transitional arrangements.

Changes in capital requirements may prompt banks to take further action, including through M&A. An easing of requirements could free up capacity for other activities, while tighter capital standards may increase the need for consolidation and sharpen the focus on capital allocation across the banking sector.

Regional divergence and private capital interest shape M&A

Dealmaking activity in insurance continues to show marked regional variation: while the number of transactions in the US has moderated, activity in Europe and Asia remains above historical averages. US insurers have remained active buyers of specialty assets, particularly in the UK and Bermuda, as they seek growth amid softening rates in certain specialty lines. At the same time, private equity continues to view insurance as an attractive long-term investment—not only for its resilient returns, but as part of a broader, secular shift driven by the outsourcing of risk, the growing role of private markets capital, and insurers’ expanding investment and asset management capabilities. Together, these dynamics are expected to sustain strategic and private capital investor interest in 2026.

Broker consolidation remains a defining theme

One of the main M&A themes of recent years has been the consolidation among insurance brokers and managing general agents. While deal activity involving brokers has moderated in the US, this segment continues to account for many of the largest transactions globally. For example, Arthur J. Gallagher’s $13.45bn acquisition of AssuredPartners and Brown & Brown’s $9.825bn acquisition of RSC Topco, the holding company for Accession Risk Management Group, both completed in August 2025. Consolidation momentum slowed down in the UK given the high level of activity in recent years and has increasingly shifted into continental Europe, particularly in fragmented markets such as Germany, Austria and Switzerland. The strategy is also spreading to other markets, including in Asia.

A more mature phase unfolds

As insurance brokerage platforms scale and target sizes increase, earlier-stage and smaller private equity–backed platforms are increasingly looking to sell to larger sponsors, strategic acquirers, sovereign wealth funds or other long-term capital providers. This evolution in the consolidation life cycle is supporting continued deal activity and providing exit pathways, even as the pace of transactions becomes more selective.

Structural shifts in capital, risk and technology

Beyond brokers, insurers are increasingly pursuing M&A and partnerships to adapt to structural shifts in capital, risk transfer, and technology. Pension risk transfer volumes remain elevated, supporting continued deal activity around bulk annuities and related capabilities. At the same time, alternative capital structures, including insurance-linked securities, catastrophe bonds, and collateralised reinsurance vehicles, are expanding the range of investment opportunities and reshaping how risk is financed. In the UK, the introduction of the London Bridge 2 risk transformation vehicle is further supporting this trend by facilitating greater participation by institutional and private markets capital, with knock-on implications for partnerships, asset origination, and M&A.

Digital enablement drives dealmaking

Technology, including AI, is also an important factor in M&A, driving insurers to acquire insurtechs and digital platforms to automate underwriting and claims processes, embed advanced data and analytics into product offerings, and enhance cyber resilience. Recent deals include Munich Re's ERGO Group’s $2.6bn acquisition of NEXT Insurance and Zurich Insurance Group’s acquisition of BOXX Insurance, a cyber insurance and risk management insurtech. Interest in algorithmic underwriting and “smart follow” capabilities is also increasing, although this remains an emerging theme to watch rather than a near-term catalyst for M&A.

Convergence accelerates M&A activity

Banks, insurers, and private equity players are all pursuing asset and wealth management transactions to capture growth and diversify earnings. While many large banks already operate asset management divisions, increasing the relative contribution of these businesses can enhance return on equity, given their fee-based income streams and lower capital intensity. Life insurers are similarly focused on scaling their AWM capabilities to strengthen customer relationships, improve asset-liability matching, and access new revenue pools. Meanwhile, private equity investors are seeking to expand their balance sheet solutions by tapping into long-term capital sources and retail distribution networks, viewing partnerships with insurers as a win–win that provides insurers with access to capabilities they may not otherwise be able to build at scale. Together, these dynamics supported the steady number of deals being transacted in 2025, with momentum expected to continue and potentially accelerate in 2026.

Wealth management as a focal point for dealmaking

Wealth management has emerged as one of the main areas of investor interest, accounting for approximately half of asset and wealth management deal volumes in 2025. Notable deals in the sector include the March 2025 acquisition of UK retail investment platform Hargreaves Lansdown by CVC, Nordic Capital, and ADIA, as well as the December 2025 announcement of an approximately $7.4bn acquisition of Janus Henderson Group by an investor group led by Trian Fund Management and General Catalyst that aims to accelerate growth and transform the business by further investing in product offerings, client services, technology, and talent.

Private equity roll-up strategies gain traction

Building on the success of insurance brokerage roll-ups and exits, private equity investors are increasingly targeting platform and roll-up strategies in wealth management, acquiring independent firms, boutiques, and mid-cap players, alongside independent financial advisors. We expect this trend to continue in the near term as consolidation opportunities remain attractive in a fragmented market.

M&A outlook for financial services in 2026

We expect momentum in financial services M&A to continue in 2026, particularly at the larger end of the market, as banks, insurers, and asset managers navigate an increasingly competitive and complex operating environment. With interest rates stabilising and regulatory frameworks in key markets becoming more supportive of consolidation, firms are likely to have greater confidence to pursue strategic transactions.

At the same time, long-standing pressures around capital efficiency, technology and AI-related investments, and resilience are intensifying, reinforcing the need to reshape portfolios, sharpen strategic focus, and build scale in a cost-effective way. Private credit has emerged as a critical wild card in this landscape, accelerating convergence across financial services sectors and reshaping traditional deal dynamics.

Our commentary on M&A trends is based on data from industry-recognised sources and PwC’s independent research and analysis. Certain adjustments may have been made to source information to align with PwC’s industry classifications. All dollar amounts are in US dollars. Megadeals are defined as transactions valued greater than $5bn.

Global financial services deal value and volume data referenced in this publication are based on officially announced M&A transactions, excluding rumoured and withdrawn transactions, as provided by the London Stock Exchange Group (LSEG). Data is as of 31 December 2025 and was accessed between 1 and 8 January 2026. 2025e is a PwC estimate to improve year-on-year comparability, adjusting December 2025 for a reporting lag. 2025e does not represent a PwC forecast. Figures may not sum precisely due to rounding.

Information on the reduction in the supplementary leverage ratio by the US Federal Reserve was sourced from a press release dated 25 November 2025 and was accessed on 21 January 2026. https://www.federalreserve.gov/newsevents/pressreleases/bcreg20251125b.htm

Information on the reduction in Tier 1 capital by the Bank of England was sourced from Financial Stability in Focus: The FPC’s assessment of bank capital requirements dated 2 December 2025 and was accessed on 21 January 2026. https://www.bankofengland.co.uk/financial-stability-in-focus/2025/fsif-the-fpcs-assessment-of-bank-capital-requirements

Christopher Sur is PwC’s global financial services deals leader and a partner with PwC Germany.

The author would like to thank Robert Boulding, a partner with PwC United Kingdom, for his contributions to the private credit spotlight. Special thanks also to Thorsten Egenolf, a senior manager with PwC Germany, for his overall support.

Global M&A trends in financial services

In 2026, financial services M&A is being shaped by technological disruption, stabilising rates, evolving regulation and intensifying competition. Private credit’s growth and firepower is accelerating sector convergence and redefining deal strategies.