Financial services M&A deals reached $12.61b in 2021: KPMG

The deal value skyrocketed from $2.86b in 2020.

Singapore experienced an upshoot in mergers and acquisitions (M&A) activity in the financial services sector during the first nine months of 2021 (YTD Q3 2021), according to KPMG's Financial Services M&A Trends in ASPAC report.

Deal activity in Singapore surged in YTD Q3 2021 due to local companies strengthening their digital capabilities to cater to customers and investing in financial technology with continued support from the Monetary Authority of Singapore (MAS).

Here are the trends per financial service sub-sector:

Asset management

Singapore as a regional financial hub for businesses and a safe haven for assets of wealthy individuals from across Asia made the sub-sector grow in recent years.

Banking

Three banking groups, DBS, OCBC, and UOB, showed higher interest in potential foreign acquisitions and expansion. Most Singapore banks were also rumoured to be considering selected country acquisitions of Citibank's consumer business across the region. The MAS also approved full digital banking licenses in late 2020 for the Grab-Singtel consortium, Shopee SEA, China's Ant Group, and Greenland Financial Holdings, all to commence in 2022. In late 2020, DBS acquired India's LakshmiVilas Bank and 13% stake in China's Shenzen Rural Commercial Bank in April 2021.

Financial technology

There was an uptick in fundraising activity by the new and startup fintech players such as Validus, Nium, Stashfin, Thunes, with the largest deal being Grab's latest fundraising round with a deal value of $405.8m (US$300m).

Insurance

The market remained relatively small at 0.56% share of global premiums, but it was ahead of most ASEAN markets. The Aviva Singlife deal worth $2.57b (US$1.9b) represented a significant part of the deal value in 2020.

(US$1 = $1.35)