2020 was a year of unprecedented peaks and troughs for European financial services M&A—a year with glittering prospects hit rock bottom in April, following the onset of the first COVID-19 lockdown. Bumper trading revenues and advisory fees recorded by the Bulge Bracket bolstered market confidence, but dividend bans and fears surrounding loan default levels soon took their toll.
Just when all seemed lost, deal-making rebounded strongly, hastening the commencement of bank consolidation M&A across Europe and the promise of an M&A bull market in 2021.
In this edition, we navigate the choppy financial services M&A landscape of 2020 to bring you key deal highlights and M&A trends across Europe and the UK. Focusing on Banks, Fintech and Other Financial Services, we also provide our insights on the outlook for M&A in H1 2021 and beyond.
Key highlights from H2 2020 include the following:
Bank M&A across Europe comes to a boil—the COVID-19 pandemic has hastened the confluence of conducive conditions for mega domestic mergers. Spain and the Balkans lead the charge, with Italy, Germany, France, Poland and the UK expected to follow.
by Guy Potel
2020 has been a turbulent year for many fintechs. Established fintechs and startups with deliverable business plans have thrived, while others have suffered the indignity of plummeting valuations and down rounds.
Market consolidation continues at pace, as the COVID-19 pandemic heaps pressure onto smaller managers
by Jan Jensen and Leonardo Graffi
Pan-European champions emerge amidst the COVID-19 turmoil— Germany (Giropay/Paydirekt), France (Worldline/Ingenico) and Italy (SIA/Nexi)
by Dr. Jost Kotthoff and Darragh Byrne
Market infrastructure juggernauts thunder the M&A plains—vertical integration remains a key focus
by Franck De Vita and Hugues Mathez
"Traditional" brokers resort to M&A to survive in the COVID-19 climate, which has boosted customer demand for DIY online trading platforms
by Daniel Turgel and Henrik Wireklint
Financial sponsors back niche providers—child-friendly, gig economy and POS finance attract interest in H2 2020
by Ashley Ballard and Jonathan Rogers
Specialty finance businesses abandon retail investor roots in favour of institutional support
Financial institutions M&A sector trends: specialty finance/marketplace lending — H2 2020 and outlook for 2021
Specialty finance businesses abandon retail investor roots in favour of institutional support
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Dichotomy between specialty finance businesses which rely on retail investors to fund lending from those which rely on institutional support. Specialty finance businesses are likely to favour institutional support in the short/medium-term, migrating away from original business models.
The world's top banks are set to earn US$27 billion from financing supply chains in 2020, which represents a rise of about 5.5%, compared with an average 2% increase in the previous four years. S&P Global (June 2020)
The COVID-19 pandemic exposed the fragility of global supply chains, and as a result, banks are now seeing a growing interest in what is still a nascent funding tool: sustainable supply chain finance. S&P Global (August 2020)
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This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
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