Global merger and acquisition (M&A) deals in the banking space saw major drops in total deal volume and value last year, thanks to economic uncertainty, rising interest rates and greater regulatory scrutiny.
Excluding 2020, banking M&A volume in 2022 reached its lowest level in six years. The year saw 167 closed transactions worth a total of $22.6bn, compared with 205 closed deals totalling $76.6bn the previous year, according to the Deloitte 2023 banking and capital markets M&A outlook.
Banks in the US announced 38 fewer deals in 2022 on annual figures, with total deal value plunging to the lowest yearly total in eight years, according to S&P Global Market Intelligence data.
In the year to April 30, 28 US bank M&A deals were announced; fewer than half the total announced over the same period in 2022. The aggregate disclosed deal value fell to $535.5m from $2bn.
Globally, M&A deals dropped 19.6% year-on-year to 505 in 2022, according to the S&P analysis that included whole bank deals, asset sales and minority investments. All regions in the analysis saw a year-on-year decline in the number of bank M&A deals in 2022 except for the Middle East and Africa region, which posted a 20% increase during the year.
With respect to 2023, the retail banking outlook is likely to be positive. Most of the issues of the sector will be among commercial banks because lenders hold most commercial real estate debt. This year might also see European and US banks spinning off their investment banking arms.
