Measured momentum: Q3'24 M&A trends in financial services

Despite mixed results in Q3, with deal volume rising but value falling compared to Q2, year-to-date mergers and acquisitions (M&A) activity remained favorable. The re-proposed U.S. Basel III Endgame (B3E) regulatory regime is expected to significantly ease banks' capital burdens compared to the previous proposal. The new version would require banks to raise less additional capital overall and increases the asset threshold for compliance. This is expected to compel more banks to pursue M&A as buyers or sellers, especially those with assets between $100-700 billion. While the re-proposal may still undergo revisions, it is a net positive for banking M&A activity.

Here are some key trends and insights from Q3'24:

• Four of the top eight deals were in insurance, including major acquisitions by Marsh & McLennan and a private equity (PE) consortium.
• Expected Fed interest rate cuts should lower deal financing costs and boost M&A, particularly for PE firms eager to deploy capital.
• However, factors such as regulatory uncertainty, economic concerns, and geopolitical risks are tempering optimism.
• Banking and insurance M&A is expected to remain relatively subdued in the near-term.
• Capital markets M&A activity depends on overall dealmaking appetite improving from current muted levels.

Download our report, Measured momentum: M&A trends in financial services, for an in-depth look at developments in the financial services sector as we head into 2025.