{{item.videoDuration}}
{{item.title}}
{{item.text}}
{{item.videoDuration}}
{{item.title}}
{{item.text}}
US bank industry dealmaking continues its steady pace
While actions taken by the Trump administration introduced significant, if only temporary, headwinds that stalled deal activity early in the year, quarterly announcements in banking remained steady through May 2025. In fact, US bank industry merger activity continued to grow through the end of 2024 and early 2025, with deal values paced by two deals estimated at more than $10 billion announced in March and April, and volumes driven primarily by smaller bank consolidation. Of note, fintech and payments companies showed increased deal activity, and we continue to see financial institutions looking for buyers as they move to divest non-core business assets and redeploy capital to core areas.
We continue to be optimistic about the second half of the year, as we emerge from uncertainty caused by tariffs and other policy changes. Factors that indicate a quickening pace in bank deals include:
- Strategic bank mergers and acquisitions are regaining traction. Institutions that prepare in advance, make decisive moves and execute with rigorous discipline — particularly in integration — are the ones most likely to generate significant shareholder value and achieve long-term competitiveness in a swiftly consolidating market.
- While the new administration is taking some of the deregulatory posture that dealmakers anticipated, it’s taking an active approach in other areas, including antitrust. Though not a direct driver of deal activity, recent actions taken by bank regulatory bodies will remove hurdles that may have dampened deal-making in recent years.
- The Federal Reserve's previously expected interest rate cuts have been postponed. Should inflationary pressures resulting from the administration's trade policies diminish, the Fed may reevaluate its current position. This could lead to lower borrowing costs, supporting economic activity and loan demand which in turn would enhance bank profits available for dealmaking.
Note: The source used in the 2025 midyear outlook is S&P Global Market Intelligence.
Preparing for competition ahead
As pressures that curbed dealmaking abate, expect significant competition for assets or entire businesses that become available. It’s crucial for management teams to have a comprehensive playbook to capture value and drive growth from transactions in this environment. In particular:
- While Basel III Endgame capital requirements may be reduced in the next proposal, there is still pressure on banks to increase safety and soundness. When considering potential deals, executives are putting more emphasis on knowing the transaction’s effect on capital and changes to the combined organization’s capital and liquidity requirements.
- In a fast-moving, high pressure bidding war or in a distressed deal, dealmakers should assemble a quick response team comprising leaders from across the institution. That team should perform due diligence dry runs so they’re prepared to operate effectively in compressed timelines.
“We expect increased banking deals activity in the remainder of 2025, as the regulatory and policy environment stabilizes and financial institutions focus on core businesses.”
Dan Goerlich,US Banking Deals LeaderThe bottom line
As we gain further insight into the impact of the new administration's actions on trade and policymaking, we anticipate an increase in both the number and size of banking deals through the remainder of the year.
{{filterContent.facetedTitle}}
{{contentList.loadingText}}
{{contentList.loadingText}}
Follow us
