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Merger and acquisition activity in the UK’s financial services industry reached its greatest volume in more than a decade in 2024, according to EY, even as the value of banking deals fell slightly during the year.
Following a relatively slow year for M&A activity in 2023, last year saw a 26 per cent year-on-year increase in the number of deals, spurred by a pick-up in activity in the insurance sector.
Overall, UK banks, insurers and asset managers publicly disclosed 380 M&A deals in 2024 — the highest annual volume since 2012 — compared with 272 deals in 2023.
The total disclosed deal value across the financial services industry rose from £12.5bn in 2023 to £20.2bn in 2024, with much of the increase coming within the wealth asset management space.
“UK financial services M&A activity reached its highest annual volume in more than a decade in 2024, as material signs of economic recovery lifted market confidence, valuations rose and inbound deals increased,” Damian Hourquebie, UK financial services strategy and transactions leader at EY, said in a statement.
While the number of UK banking deals specifically rose from 53 in 2023 to 70 in 2024, the total value of deals for the year decreased to £6.3bn from £6.7bn in 2023.
The number of UK insurance deals rose from 112 in 2023 to 188 in 2024, with the total publicly disclosed deal value increasing from £3.7bn in 2023 to £4.6bn in 2024.
The number of UK wealth and asset management deals increased from 107 in 2023 to 122 in 2024, with total publicly disclosed deal value rising from £2.1bn in 2023 to £9.3bn in 2024.
“While there are real signs for optimism, a sense of macroeconomic uncertainty and geopolitical tensions further abroad could create headwinds as we look to the year ahead,” Hourquebie said.
“However, if the UK’s economic outlook continues to gradually improve as expected, we anticipate the focus on M&A activity will continue throughout 2025 as confidence grows and firms accelerate plans to transform.”
The number of acquisitions by UK firms abroad as well as non-UK entities seeking UK firms also rose over the same period.
For UK firms acquiring overseas targets, deals increased in number to 97 in 2024 from 65 the year before, with the overall deal value remaining flat at £1.7bn.
Non-UK firms acquiring UK targets rose from 54 in 2023 to 74 last year. However, the total disclosed value fell from £6.7bn in 2023 to £3.9bn in 2024.
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