Global Banking M&A Trends 1H22 | Review of 1H of 2022

With the number of deals up by 32 percent and deal value rising by 42 percent, the global banking M&A market recovered strongly in 2021, reflecting the upturn in many economies as the worst effects of the pandemic receded. Consolidation was a recurring theme across multiple countries/ territories and regions, often driven by regulators eager to make banks stronger and reduce risk.

Although year-on-year deal volume in the first half of 2022 declined due to the war in Ukraine, economic disruption, and surging inflation, deal value still rose, on the back of some high value deals, primarily in ASPAC.  The activity in Asia tends to be dominated by domestic buyers, partly due to restrictions on foreign ownership in certain key nations.

Another key factor that has started to influence banking M&A is ESG (environmental, social and governance). This is very much becoming a new normal, with banks’ credentials, and those of their corporate clients, under increasing scrutiny. In the same way that the sector adapted to higher capital requirements, it’s hoped that ESG will become absorbed into banks’ operating models, although there may be some implementation costs regarding reporting and associated data gathering.