德勤：2022年银行和资本市场并购展望_24页_2mb

Summary of 2022 Banking and Capital Markets M&A Outlook

Core Content

The document provides an overview of the M&A landscape in the Banking and Capital Markets (B&CM) sector, highlighting the rebound in deal activity following the challenges of 2020 and the expected continuation of this trend in 2022. It analyzes M&A activity across three major sub-sectors: banking, investment management (IM) and wealth management (WM), and fintech, payments, and exchanges. The key themes include digital transformation, strategic realignment, and the increasing convergence of traditional and digital financial services.

Main Points and Trends

2021 Review

• Banking M&A:

  • 210 transactions were announced in 2021, an 89% increase from 2020.
  • Average deal value rose to $693 million from $546 million in 2020.
  • The West had the highest regional activity, but the Mid-Atlantic and Midwest regions showed potential for increased dealmaking.
  • The price-to-tangible book value (P/TVB) increased to 156%, up from 136% in 2020.
  • Most deals were at the small-bank level, with a focus on digital transformation and market expansion.

• IM and WM M&A:

  • 316 deals were announced in 2021, a 50% increase from 2020.
  • The focus shifted from large transformative deals to smaller, value-creating acquisitions.
  • Deals included expanding into alternative investments, enhancing digital offerings, and increasing scale.
  • Private equity (PE) firms were active in acquiring IM and WM assets, with notable deals like T. Rowe Price's $4.2 billion acquisition of Oak Hill Advisors and Franklin Resources' $1.75 billion purchase of Lexington Partners.

• Fintech, Payments, and Exchanges M&A:

  • Fintech M&A continued to grow, with 216 transactions in 2021, a 31% increase from 2020.
  • Fintech investment reached $36.2 billion in Q3 2021, up 153% from the previous year.
  • Major deals included Block's $29 billion acquisition of Afterpay and PayPal's $2.7 billion purchase of Paidy.
  • BNPL (buy now, pay later) lending has become a significant area of interest, with both fintechs and banks acquiring BNPL firms to expand into this market.

2022 Outlook

• Trends:

  • Banks are re-evaluating their portfolios and seeking partners to increase scale and digital capabilities.
  • M&A is expected to continue as a tool for digital transformation, enhancing customer experience, and improving competitive positioning.
  • IM and WM firms are likely to pursue more capabilities-driven deals, especially in digital technologies and alternative investments.
  • Fintechs will continue to seek funding and strategic acquisitions to expand their offerings and transition into end-to-end service providers.

• Drivers:

  • The acceleration of digital transformation due to the pandemic.
  • The need for scale, diversification, and innovation.
  • Regulatory clarity and evolving tax and accounting policies.
  • Opportunities in BNPL and decentralized finance (DeFi) and cryptocurrency.

• Challenges:

  • Access to capital and asset valuations remain concerns.
  • Regulatory activity may slow down large bank mergers.
  • A competitive deal market and limited acquisition targets could pose obstacles.

Key Information

• Deal Volume and Value:

  • Banking: 210 deals in 2021, $77.6 billion in disclosed value.
  • IM/WM: 316 deals in 2021, with an average deal value of $536 million.
  • Fintech: 216 transactions in 2021, with a total value of $1.16 billion for US-based targets.

• Major Deals:

  • BMO's $16.3 billion acquisition of Bank of the West.
  • US Bancorp's $8 billion purchase of Union Bank.
  • T. Rowe Price's $4.2 billion acquisition of Oak Hill Advisors.
  • Block's $29 billion purchase of Afterpay.
  • PayPal's $2.7 billion acquisition of Paidy.

• Integration Strategies:

  • Fintechs are adopting either aggressive assimilation or preserve and retain strategies.
  • Aggressive assimilation involves integrating products and capabilities into the parent company's existing business.
  • Preserve and retain strategies aim to maintain the acquired fintech's independence while leveraging the parent's resources.

• Digital Transformation:

  • Digital engagement is a key driver for M&A in IM and WM.
  • 38% of digitally advanced firms expect better revenue prospects in 2022.
  • Investment in digital technologies is the top driver for M&A in these sectors.

• Macroeconomic and Market Conditions:

  • Positive macroeconomic conditions and abundant capital are expected to support continued M&A activity.
  • The convergence of banking, payments, and retail is creating new opportunities in BNPL and digital services.
  • The "war for talent" is pushing B&CM organizations to acquire fintechs for their innovative teams and capabilities.

Conclusion

The B&CM sector is expected to maintain a high level of M&A activity in 2022, driven by the need for digital transformation, market expansion, and competitive positioning. While challenges like regulatory changes and access to capital persist, the sector's momentum and evolving landscape suggest that M&A will remain a key growth strategy. Fintechs and traditional banks are increasingly merging, and the integration of digital capabilities is becoming a central focus for all players in the industry.