July 2022
We highlight the key UK & European M&A trends in H2 2021 and H1 2022, and provide our insights into the outlook for M&A moving forward.
July 2022
We highlight the key UK & European M&A trends in H2 2021 and H1 2022, and provide our insights into the outlook for M&A moving forward.
Key highlights from H2 2021 include the following:
High levels of M&A across the UK and Europe, notwithstanding uncertainty ignited by the Russia/Ukraine conflict. Europe’s banks have emerged from COVID-19 turmoil resolute in their ambitions to shed non-core assets, consolidate regional strongholds and rigorously pursue digitalisation strategies
Europe has bucked the global trend of tightening private capital purse strings. While successful funding rounds rage on, fintechs with critical mass are deploying M&A strategies to consolidate horizontally and integrate vertically
With over 350 deals in the European AWM sector in 2021, M&A consolidation activity is hotter than it has ever been in the past 15 years. Conventional wisdom is now under the microscope—is bigger really better?
Investor appetite is at an all-time high—while VC investors back growing service providers, PE investors supercharge IPO glide paths and established banks refuse to abdicate market share
Europe’s FMI goes digital—data analytics, capital markets solutions, RegTech and DLT-based tech acquisitions feed the steady stream of M&A activity
Marginal improvement in investor sentiment for high-quality brokers, particularly across online brokerage, crypto trading and carbon credit trading
BNPL steals the show—20 successful European BNPL provider funding rounds in the past 12 months, covering the full spectrum from Seed through to late-stage
Marginal uptick in M&A levels in the past 12 months, with property, automotive and revenue-based finance attracting the most investor interest
UK & European Financial Services M&A: Sector trends H2 2021 | H1 2022 — Banks
Our outlook for bank M&A is extremely positive despite current market uncertainty. Many of Europe’s lenders dedicated significant resources towards fine-tuning their development strategies during COVID-19 lockdowns. The result is emergence with clear goals into an increasing NIM environment.
Hyder Jumabhoy
High levels of M&A across the UK and Europe, notwithstanding uncertainty ignited by the Russia/Ukraine conflict. Europe’s banks have emerged from COVID-19 turmoil resolute in their ambitions to shed non-core assets, consolidate regional strongholds and rigorously pursue digitalisation strategies.
Strong growth in M&A activity as Europe’s banks exit hiatus, hastened by the Russia/Ukraine conflict, into a higher interest rate environment. Growth to be spurred by restocked war chests following non-core business disposals, freeing-up of balance sheet capacity through legacy NPL portfolio sales and the need to consolidate market share as well as implement ambitious digital transformation strategies.
View full image: Asset management structure (PDF) Option 1: Asset management structure
View full image: 3rd-party/Retained securitisation structure (not supported by HAPS) (PDF) Option 2: 3rd-party/Retained securitisation structure (not supported by HAPS)
View full image: 3rd-party securitisation structure supported by HAPS (PDF) Option 3: 3rd-party securitisation structure supported by HAPS
ECB aims to complete a detailed assessment of how international banks manage their EU business by early 2022 (Financial Times, December 2021)
Nationwide Building Society will not leave any town or city in which it is based without a branch until at least 2024 (Finextra, June 2022)
FCA to be granted new powers over the UK’s largest banks and building societies to ensure that cash withdrawal and deposit facilities are available across the UK (Financial Times, May 2022)
Cambuslan and Rochford were two UK locations chosen to host shared branches formed out of a collaborative effort between the state-owned post office and Britain’s largest retail banks (Financial Times, January 2022)
Access to Cash Action Group, supported by UK retail banks, Age UK, Toynbee Hall and the Federation of Small Businesses, pioneers network of UK shared banking hubs (Finextra, December 2021)
UK banks shut 736 branches in 2021, according to consumer group Which?, which is calling on lenders to pause further closures (Finextra, December 2021)
White & Case advised Alpha Bank, the largest of Greece’s four systemic banks by market capitalisation, on the disposal of Alpha Bank Albania, its Albanian banking subsidiary, to Hungary’s OTP Bank.
White & Case advised UniCredit on its disposal of the majority of its remaining 20% stake in the Turkish bank, Yapı ve Kredi Bankası, to Koç Holding.
ECB has taken the rare step of appointing a temporary administrator to oversee the wind-down of RCB Bank, a Cypriot lender with strong Russian ties (Financial Times, March 2022)
EBA has raised concerns over banks’ exposure to hospitality and leisure-related sectors, where NPL ratios are on the rise. (S&P Global, December 2021)
EU banks could suffer €308 billion of credit losses by 2023 if COVID-19 and the low interest rate environment were to be prolonged, with the largest losses across France, Italy, Germany, the US, Spain and the Netherlands. (S&P Global, July 2021)
White & Case advised Atlas Mara and the other controlling shareholders on the disposal of Union Bank of Nigeria, one of Nigeria’s longest-standing and most respected lenders, to Titan Trust Bank.
White & Case advised Landesbank Baden-Württemberg, the full-service savings bank in Baden-Württemberg Rhineland-Palatinate and Saxony, on its acquisition of Berlin Hyp, a leading commercial real estate financing provider in Germany.
White & Case advised Spain’s BBVA on its €2.25 billion voluntary tender offer to acquire 50.15% of T. Garanti Bankası, the second-largest bank in Turkey.
White & Case advised France’s Crédit Mutuel Arkéa on the disposal of Keytrade Bank Luxembourg, the online challenger bank, to Swissquote Bank.
Banks are on pace to merge at a level not seen since the 2008 financial crisis. It is a sharp turnaround from 2020, when the economy spiralled and many regional and community banks put merger plans on the shelf. (Financial News, September 2021)
Lenders are tipped for further M&A and capital markets activity amid positive signs for the sector, including confidence in asset quality and the prospect of inflation. (Mergermarket, July 2021)
Please refer to the ‘Fintech’ sub-Report in this series.
White & Case advised The Co-operative Bank on the acquisition of a significant minority interest in the bank by J.C. Flowers & Co and Bain Capital.
White & Case advised Goldman Sachs on the €1.8 billion consortium take-private offer, alongside Advent, Centerbridge, CPPIB and LGT, for Aareal Bank, the Frankfurt Stock Exchange–listed specialist property lender.
White & Case advised Orange, the French telecommunication group, on the acquisition of the remaining minority stake held by Groupama in Orange Bank, the French neo-bank.
White & Case advised Syndeo Capital, the UK-based financial services specialist financial sponsor, on: its long-term strategic partnership with iFast Corp., the Singapore-listed WealthTech unicorn, in relation to BFC Bank; and its winning auction bid to acquire BFC Bank, a fully licensed UK deposit-taking institution providing cross-border banking and FX services.
PE firms have set their sights on mid-tier UK banks, but a divergence over valuations has stymied deal-making—for now (S&P Global, November 2021)
White & Case advised N26, a Berlin-based neo-banking unicorn, on certain regulatory and compliance considerations in the context of its US$900 million Series E funding round.
UK’s FCA has found evidence of growing competition in financial services, driven in part by the COVID-19 pandemic and the rise of digital challenger banks. (Finextra, January 2022)
Funds donated by The Banking Competition Remedies Board to inject competition into the UK’s business banking market have led to a 13% shift away from large incumbent banks to smaller rivals. (Finextra, November 2021)
FSB says that the COVID-19 pandemic has enabled Big Tech firms like Google, Amazon and Apple to widen their footprint in financial services. (Finextra, March 2022)
Citi snaps up Europe activism experts to brace for shareholder ‘Trojan Horse’. (Financial News, April 2022)
115 investors managing US$4.2 trillion in assets has called on 63 global banks, including HSBC and Deutsche Bank, to take more action to tackle climate change and biodiversity loss. (S&P Global, July 2021)
Click here to download the PDF: Europe’s banks emerge from the COVID-19 pandemic resolute in their ambitions
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