We continue to believe that macroeconomic conditions and Fed policy will dictate the level and pace of financial services M&A in 2023
The trend in financial services (FS) mergers & acquisitions (M&A) activity turned positive in the second quarter. Compared to Q1'23, total deal value rose 9.7 percent to $63.6 billion from $58.0 billion, and total volume went up 3.1 percent to 1,150 deals from 1,115.
Economic uncertainty remained the biggest obstacle for potential buyers and sellers. Inflation and interest rates continued to rise—albeit at a slower pace—and the political showdown over an extension of the debt ceiling prompted significant anxiety in May. The availability of credit tightened, furthermore, as banks responded to stressful developments in the first quarter.
We continue to believe that macroeconomic conditions will dictate the level and pace of FS M&A in 2023. Appetite for deals among buyers and sellers remains highly dependent on the Federal Reserve’s interest-rate policy, itself a function of the Fed’s outlook for inflation.
For the latest market trends and KPMG deal professionals’ view of what may lie ahead, please download our Q2’23 report.