Financial services M&A deal value rise 40% on improved bank profitability

Postal Savings Bank of China’s $18.1b deal with China Mobile is the year’s top deal.

Mergers and acquisitions (M&A) activity in the financial services sector ramped up in 2025, with China logging some of the most notable deals globally.

M&A deal value rose 40% year-on-year (YoY) to $499b across 612 transactions globally, according to data from McKinsey & Co.

Improved bank profitability, and higher for longer interest rates, strengthened banks’ balance sheets and created a more favorable backdrop for strategic banking combinations, the management consulting group said in an article published on 13 February 2026.

The Asia–Pacific region accounted for 23% of the total deal value in financial services (about $116b), with lower average asset prices and a slow recovery in cross-border flows.

China logged some of the most notable deals in the past year, including a $18.1b capital-raising exercise involving China Mobile Communications and the Postal Savings Bank of China. This was the top M&A deal in the financial services sector in 2025.

There were also “further efforts by companies to consolidate and create stronger domestic powerhouses that could compete globally,” McKinsey wrote in its report.

In late 2024, China is reported to be in the process of cleaning up its rural financial institutions through mergers. The country spearheaded the merger of 70 rural banks at the time since 2023.

Analysts at the time said that it could take up to 10 years to clean up the sector.

Hang Seng Bank’s privatisation made it to the list of top global deals for 2025, with HSBC shelling out $13.6b to delist the Hong Kong-based bank.

Globally, the average transaction size increased to $815m from $590m previously.

Large transactions between $1b to $10b accounted for over half of the total deal value.

M&A activity within the wealth and asset management rose 15% in 2025, slowing after a few years of consolidation. Notable deals in the space include ING’s purchase of a stake in Van Lanschot Kempen in 2025.

“Similarly, there was a significant slowdown in deals involving capital market infrastructure after several years of consolidation in this subsector,” McKinsey wrote.