Asia-Pacific M&A hits lowest Q1 level in at least three years

The quarter was dominated by smaller asset management and insurance activity.

Financial sector mergers and acquisitions (M&A) in Asia-Pacific are expected to recover gradually after deal activity fell sharply in the first quarter of 2026, as uncertainty linked to the war in the Middle East weighed on transactions.

M&A deals in the region’s financial sector fell to 78 in the January-March quarter, down from 150 a year earlier, according to S&P Global Market Intelligence’s Global Industry M&A Trends - Q1 2026 report. It was the lowest first-quarter level in at least three years.

The quarter was dominated by smaller transactions, particularly in asset management and insurance. No deal exceeded $750m.

Analysts expect Japan and India to help drive a recovery in activity. India recorded 21 announced financial sector M&A deals in the first quarter, compared with 20 in the fourth quarter of 2025 and 32 a year earlier.

Australia recorded 10 deals, unchanged from the previous quarter but down from 13 in the first quarter of 2025. 

China reported nine deals, compared with 18 in the previous quarter and 31 a year earlier.

Hong Kong recorded eight deals, down from nine in both the previous quarter and the first quarter of 2025. 

Japan had eight deals, compared with 10 in the previous quarter and 20 a year earlier.

Across banking, dealmaking remains selective. Transactions with a clear strategic purpose, such as scaling up operations, diversification or capital optimisation, are more likely to proceed in the current market.