Bank M&A to Get ‘Significant’ Boost in 2019, Ernst & Young Says

(Bloomberg) -- The U.S. banking sector is set to see a flurry of deals next year, according to Ernst & Young LLP.

Transactions will be fueled by easing regulations and the U.S. tax overhaul, which has helped lenders build up a war chest to spend on acquisitions and technology, the financial advisory firm said Tuesday in a report. The value of mergers and acquisitions in the U.S. financial-services sector more than doubled to $196.5 billion this year from $82.3 billion in 2017, according to EY’s analysis.

“We’re going to see a significant increase in M&A,” Sharon Dogonniuck, senior managing director of banking and capital markets at EY, said in an interview in New York. “Absolutely we think there are going to be larger deals” in addition to the smaller transactions that have already taken place.

Banks are using M&A to add clients, market share and products, while also expanding their capabilities in technology and data, EY said.

The outlook in the U.S. is even more bullish than the rest of the world, according to Nadine Mirchandani, U.S. financial services leader in EY’s M&A advisory service.

“The fundamentals for M&A in financial services are fairly strong,” with transactions mostly concentrated in the $1 billion to $5 billion range so far, Mirchandani said in an interview on Bloomberg Television.

To contact the reporter on this story: Lananh Nguyen in New York at lnguyen35@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Dan Reichl, Josh Friedman

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