Insight

Big bank M&A is back from 2020 low, but new risks come too

As deal complexity and regulatory scrutiny increase, Q2 trends show effective due diligence and execution have heightened importance

Timothy Johnson

Timothy Johnson

Financial Services Industry Leader, Deal Advisory, KPMG US

+1 312-665-1048

Jack Whitt

Jack Whitt

Principal, Advisory Strategy, KPMG US

+1 703-286-8807

Bob Ruark

Bob Ruark

Principal, Banking & Fintech Strategy Leader, KPMG US

+1 704-371-5271

Michael J. Stachowiak

Michael J. Stachowiak

Managing Director, Deal Advisory and Strategy Banking Practice, KPMG US

+1 312-665-2923

Large-scale bank M&A has recovered from last year’s slump. In Q2 ’21, there were 62 deals, up from just nine in Q2 ’20. The trend is even sharper at the top: Eight billion-dollar deals were announced since 2020, which is more than the total such deals in the last 17 years. Banks are seeking scale to boost efficiency, acquire tech, enter new markets, and reap the benefits of low interest rates.

However, the KPMG M&A Trends in Banking cautions that large deals face headwinds—from Washington, Wall Street, and Silicon Valley. Bigger mergers could mean more regulatory scrutiny as policymakers lean toward stricter oversight. Large deals also bring complexity and high investor expectations, and many underperform. Plus, fintechs are becoming acquirers in M&A and cutting into fees, adding more competition to the deal landscape.

Bank M&A value driven by larger deals

While the number of deals declined significantly in 2020 …

… larger deals in last three quarters drove up aggregate transaction values… 

Acquirer Target Announcement Date Size
Old National Bank First Midwest Bank Jun-21 $2.5B
BancorpSouth Cadence Apr-21 $2.8B
Webster Bank Sterling Apr-21 $5.1B
New York Community Flagstar Apr-21 $2.6B
M&T Bank Peoples United Feb-21 $7.6B
Huntington TCF Dec-20 $6.0B
PNC BBVA USA Nov-20 $11.6B

Large transactions are back, promising more opportunity for improved performance

Acquirer Target Announcement Date Size
Old National Bank First Midwest Bank Jun-21 $2.5B
BancorpSouth Cadence Apr-21 $2.8B
Webster Bank Sterling Apr-21 $5.1B
New York Community Flagstar Apr-21 $2.6B
M&T Bank Peoples United Feb-21 $7.6B
Huntington TCF Dec-20 $6.0B
PNC BBVA USA Nov-20 $11.6B

Source: S&P Global (SNL Financial), data as of 4 June 2021; Company Filings


This KPMG quarterly report unpacks how investors can assess these headwinds, and the heightened importance of thorough due diligence and effective post-deal implementation.