Chain Mail: Mergers & Acquisitions are Changing the Face of the Financial Industry

FSL’s Chain Mail is a regular blog containing links to news articles that we think are worth sharing. In this edition, we explore some of the prominent M&A deals and the implications these have for the financial industry.

Mergers and acquisitions are common in the financial industry, driven by a company’s desire to maintain competitive advantage and at times expand into foreign jurisdictions. 2022 had one of the highest number of deals, particularly in the first half of the year. Forecasts for 2023 are just as high, with a number of new M&As in the first quarter highlighting significant deal growth this year.

Some of the acquisitions so far this year include, asset management firm Lazard seeking to expand its offerings with its latest acquisition of Truvvo Partners, a US-based family office. Together, the duo have created Lazard Family Office Partners. The move highlights ways in which different companies aim to broaden their services in order to expand their client base.

A similar deal can be seen in Natwest’s acquisition of Cushon. The fintech company offers workplace ISAs and pensions, not previously seen in Natwest’s portfolio. Services are therefore no longer segmented in the financial industry, with M&As making it easier for consumers to meet their needs with the broadened offerings of one company.

Another company considering an M&A this year is Evelyn Partners – the firm is searching for acquisition opportunities in a bid to “enhance growth”. They are notably also looking for potential acquisitions in the professional services industry, alongside financial services, showing that cross-industry acquisitions can widen the scope of a company’s offerings even further.

Finally, HSBC’s acquisition of the UK arm of the collapsed Silicon Valley Bank showcases another strength of M&As: the power to protect clients. The sale of the UK arm for £1 will allow “SVB UK’s customers and depositors…to access banking services as normal”. This will help clients to retain stability in a tumultuous time and simultaneously boost HSBC’s profile within the banking community.

The financial services industry is fast-moving and ever-evolving. M&As is just one way in which companies can remain competitive and help move the industry forward. We will continue to monitor the trend over the coming months.