Deal activity fell as the industry suddenly faced a barrage of challenges, including record-low interest rates, the possibility of a slow recovery and pressures on loan portfolios. For now, a lot of firms have switched to a position of “wait-and-see,” but the pandemic is affecting geographies and industries differently. This could spell opportunity as new acquisition targets emerge. During the coming year we could see renewed industry consolidation, as healthy banks buy those in distress.
“Banks, scrambling in the face of the pandemic, are trying to stabilize loan portfolios, control costs and overhaul strategies for capital deployment and growth. Winners and losers may emerge, triggering much-needed consolidation.”
We define M&A activity as mergers and acquisitions in which targets are US-based banking and capital markets companies acquired by US or foreign buyers. We have based our findings on data provided by industry-recognized sources. Specifically, values and volumes used throughout this report are based on announcement date for transactions with a disclosed deal value, as provided by Capital IQ, as of June 30, 2020, and supplemented by additional independent research.
Information related to previous periods is updated periodically based on new data collected by Capital IQ for deals closed during previous periods but not reflected in previous data sets. Deal information was sourced from Capital IQ and includes deals for which buyers or targets fall into one of the BCM industry sub-sectors: Commercial and Retail Banks, Consumer Finance, Diversified Financial Services, Non-bank Lenders, Investment Banking & Brokerage. Certain adjustments have been made to the information to adjust for transactions that our data sources classify as financial services but which we assign to technology and other sectors, or vice versa.
Banking and Capital Markets Deals Leader, PwC US