Asset Atlas presents a comprehensive picture of deal activity and future opportunities across the financial services sector, including non-performing loans (NPLs), private equity and fintech. It is a must-read for key M&A decision-makers in Corporate Development and other specialist M&A functions. You are invited to view the highlights of the global financial services, banking, insurance and asset management. Please reach out to us for the full report.
The first half of 2019 saw a slow-down in deal volume with a mild uptick in value year-on-year. Mega-deals have kept the market bubbling, supported by growth drivers, notably low funding costs and strategic ambition. However, global economic slowdown fears and signs of recession have slashed deal activity in all major targeted economies (US, UK, Germany, China and India).
Banking to see a flurry of deals
Global bank consolidation is set to continue, leading to mergers of equals (MoE) in the US, mega-consolidation deals in Europe and bancassurance partnerships in ASPAC. Also expect M&A in innovation, digital capabilities and payments.
Digital partnerships — a shift in thinking for incumbent insurers
Insurers continue to consolidate and divest non-core/legacy assets. Digital insurance partnerships are a new priority, to acquire innovative digital capabilities and keep pace with rapid insurtech change.
Asset managers — growth potential despite continued cost pressures
Global investment managers target China, India, and ASPAC. Passive funds continue to garner assets. Tech-savvy firms are disrupting online fund distribution, digital advice and micro-investing.
Outsourcing non-performing loans (NPLs) — an emerging trend
Banks are building strategic options for NPL management from asset sale to structured credit. This often means outsourcing workout loan activities by partnering with a specialist third party service provider.
Private equity activity soars with no end in sight
Private capital dry powder targeting North America has reduced and re-directed towards Asia. Buyers are attracted to insurance brokerage, specialty finance, platform and payment firms, consumer finance, leasing, credit cards, robo-advisory wealth managers, distressed banks, NPLs and fintech.
UK: payments transactions to boom in fragmented market, with PE as major players; specialty finance remains hot; consolidation among challenger banks
Italy: continued consolidation at domestic level (popolari and small savings banks); disposal of unlikely-to-pay (UTP) loans
Spain: deals around digital transformation and instant payments; non-performing loans (NPLs) remains hot; domestic middle market consolidation; many large banks outsource back-office activities to specialist players; banks with strong consumer finance seek joint ventures with non-financial services players
China: virtual banks on rise; NPL disposals continue; payments attractive; more regional activity with focus on SE Asia
Japan: banks focus on automation and enhancing online capabilities; major banks expanding SE Asia partnerships
Indonesia: increased appetite for inbound M&A; financial digital services growing; domestic banking consolidation; large e-commerce players targeting payments value chain; South Korean and Japanese banks are potential investors
US: fintech – especially payments, back office and back technology; bank consolidation
Canada: banks investing in wealth management; specialty finance and payments
LATAM: fintech partnerships to build payment processing, front-end customer acquisition and mobile wallet capabilities
UK: rising deals in insurance distribution and broking; consolidation in life/non-life underwriting
Italy: strong activity expected in health/welfare; renewal of life bancassurance agreements
Spain: disposal of large, low-value savings portfolios
China: domestic market consolidation in both personal & casualty and life & health sub-sectors
Hong Kong (SAR): life insurance assets remain attractive
Japan: insurance and leasing companies remain active in the US and ASPAC (especially China)
Indonesia: consolidation; significant M&A interest from foreign investors
US: travel assistance insurance opportunities; life and annuity firms divest legacy blocks; insurance brokers consolidate
Canada: considerable activity in insurance distribution
LATAM: life and health insurance active
Italy: further concentration involving medium and smaller asset management firms; potential interest from financial groups and PE
Spain: consolidation in asset/wealth sector; insurance players as potential buyers
Luxembourg/Switzerland: consolidation among small/medium private banks
Australia: international investors targeting banks’ asset management businesses
China: European private banks and wealth management firms seek partnership/M&A opportunities; Chinese asset managers targeting alternative investment funds in Europe; global fund managers eye pension businesses
India: REITs remain popular
US: registered investment advisors and independent broker dealers remain active
Canada: many deals, with larger banks consolidating small asset managers
LATAM: attractive alternatives segment; international managers targeting the region