The year 2020 was a record year for the number of mergers and acquisitions in the global banking sector.
According to data presented by Finaria, the number of banking merger and acquisition deals hit over 1,300 last year, more than in 2018 and 2019 combined.
Record Number of Mergers and Acquisitions, but no Larger Deals
Merger and acquisition activity in the banking sector had been decreasing year-on-year since 2009, revealed Statista and the Institute for Mergers, Acquisitions and Alliances data.
Statistics show the number of deals plunged from 1,295 to 904 between 2009 and 2015 and continued falling in the following years. In 2018, merger and acquisition activity in the banking sector dropped to only 718 deals. This figure slipped to 619 in 2019, the lowest number of deals since 1989.
Deal activity in the banking and capital markets sector slumped in early 2020, both in volume and reported size. Companies had more immediate concerns, starting with operational issues tied to the COVID-19 pandemic.
However, the number of deals in the banking sector significantly increased by the end of the year, reaching a 20-year peak. The Institute for Mergers, Acquisitions and Alliances data show in 2020 alone, 1,316 deals were completed globally, 112% more than in 2019.
Although 2020 was a record year for the number of mergers and acquisitions in the global banking sector, statistics show this did not translate into larger deals. The value of all deals completed in 2020 barely surpassed $100bn, a 20% plunge in a year. Compared to the 1990s and 2000s, when the value of mergers and acquisitions topped $250bn, this figure represents a considerable decrease.
Three Biggest M&A Banking Deals in 2020
In July 2020, Intesa Sanpaolo, Italy’s second-largest bank behind UniCredit, concluded a takeover of its local rival, UBI Banca, the fifth-largest bank in the country.
UBI, which had its own merger ambitions as the healthiest among Italy’s second-tier banks, fought against the plan. The $4.8bn worth deal, as one of Europe’s biggest banking acquisitions in a decade, created the seventh-largest bank in the eurozone focused on wealth management and insurance with $1.2 trillion in assets.
In September, Spain’s third-largest bank by assets, CaixaBank, confirmed a merger with Bankia, the country’s fifth-biggest bank by assets. The merged entity became Spain’s largest lender by market share in both domestic loans and deposits. Together, the two banks hold assets of more than €650 billion.
In December 2020, the US bank PNC completed an acquisition of BBVA USA Bancshares, Inc., and its US banking subsidiary, BBVA USA. Through this $11.6bn worth deal, PNC became America’s fifth-largest bank by assets. PNC now sits under Citi, Wells Fargo, Bank of America, and JP Morgan Chase.