Financial services M&A reaches 12-year high

Dealmaking in the UK financial services industry hit its highest volume in 12 years during 2024, according to new research, amid improved market confidence, stronger valuations and increased inbound activity.

EY found that, following sluggish activity during 2023, financial services M&A volume increased by 26 per cent during 2024, with 380 publicly announced deals across the banking, insurance and asset management sectors.

This was up from 272 deals in 2023 and represented the highest annual volume in the sector since 2012. Total disclosed deal value, meanwhile, increased from £12.5 billion in 2023 to £20.2 billion last year.

The pick-up in activity was largely driven by a significant increase in insurance M&A, with the number of UK insurance deals rising from 112 in 2023 to 188 in 2024. The total disclosed value of insurance M&A increased from £3.7 billion to £4.6 billion.

Wealth and asset management deals increased from 107 to 122, while disclosed deal value soared from £2.1 billion to £9.3 billion. However, while banking deals increased from 53 in 2023 to 70 last year, publicly disclosed deal value fell slightly from £6.7 billion to £6.3 billion.

The number of deals involving a UK buyer acquiring an overseas target increased from 65 in 2023 to 97, with the publicly disclosed value of these deals remaining steady at £1.7 billion. Inbound acquisitions of UK financial services targets by non-UK buyers also increased, from 54 to 74, but the value of these deals fell from £6.7 billion to £3.9 billion.

Commenting on the findings, Damian Hourquebie, UK Financial Services Strategy and Transactions Leader at EY, said: “UK financial services M&A activity reached its highest annual volume in more than a decade in 2024, as material signs of economic recovery lifted market confidence, valuations rose, and inbound deals increased.”

“While there are real signs for optimism, a sense of macroeconomic uncertainty and geopolitical tensions further abroad could create headwinds as we look to the year ahead. However, if the UK’s economic outlook continues to gradually improve as expected, we anticipate the focus on M&A activity will continue throughout 2025 as confidence grows and firms accelerate plans to transform.”

Also read:
Foreign takeovers once again driving UK deals

UK M&A outlook 2025

Over 90 per cent of financial services firms would consider M&A

NatWest boss predicts further UK banking consolidation

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