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Jeudi 29 Septembre 2011

Asian financial services M&A poised to accelerate in late 2011 and 2012

Domestic activity continues to dominate but there is increasing appetite for cross-border transactions. Asian financial sector deal values are up 40% from last year. China leads the way for financial services deal activity, which has increased by 129% since 2009 and is now worth $16.7bn

As the focus of global economic growth rapidly shifts to the East, financial services (FS) mergers and acquisitions (M&A) in Asia are expected to accelerate in late 2011 and 2012, according to a new report from PwC, ‘Emerging Opportunities: Financial Services M&A in Asia 2011’. Furthermore, a large majority of the 375 Asia-based senior executives that were interviewed for the report are extremely bullish about the prospects for M&A in their market.

Asian financial sector deal values totalled US$27.7bn for the first half of 2011, 40% more than the comparable figure of US$19.8bn for the first six months of 2010. In addition, the continued growth of economies in most Asian countries will continue to stimulate growth in financial services.

Matthew Phillips, leader of financial services M&A for Asia at PwC, said:
“M&A is becoming an ever more important strategic tool for financial institutions in Asia to grow, whether local, regional or global in outlook. We expect to see increasing M&A activity in Asia through 2011 and into 2012 as the focus of global economic growth shifts Eastwards. We therefore believe that the findings of this survey, the largest in the six years that this report has been produced, offer particularly valuable insight as the world looks to Asia to continue to lead the global economy.”

Domestic M&A activity remains the predominant driver of Asian financial services transactions, but there is also an increasing appetite for cross-border transactions. M&A activity is being stimulated by a range of strategic factors. These include domestic competition, growing pressure on operational and capital efficiency, and ongoing divestments by strategic investors from outside the region.

Nelson Lou, transaction services partner, PwC China, said:
“Notwithstanding the economic uncertainties on the horizon, many Asian financial institutions are increasingly keen to use M&A within the region to acquire customers, and to create financial conglomerates offering sophisticated product offerings to their corporate and high net worth clients. In general, Asian regulators have been able to take a less stringent line on capital, liquidity and separation of retail and investment banking than their counterparts in the West. In some markets regulators are encouraging the emergence of stronger institutions but the spectre of protectionism remains.”

Obstacles to successful M&A strategies do not end when the deal is signed. Post-deal barriers are a particular concern in financial services where IT systems are highly complex, reputations are easily damaged and regulators are watching closely. Respondents to the survey agree that these factors are all potential post-deal challenges, however, 51% identify culture and people issues as the greatest challenge for management.

Matthew Phillips, leader of financial services M&A for Asia at PwC, said:
“Cultural and people challenges can be difficult to manage in any industry, especially when M&A is taking place across borders or language barriers. The challenge is particularly acute in financial services, where the collective expertise of management and staff is often a firm’s most sustainable source of competitive advantage. Retaining talent is a key management challenge for financial services leaders at the best of times, let alone during the uncertainty that often flows from an acquisition, so a considered approach to human capital management is vital at every stage of the deal process.”

One key feature of Asian financial services transactions in 2010 was the increasing importance of Chinese M&A activity. Chinese financial services M&A in 2010 was worth a total of US$16.7bn, by far the largest figure for any Asian country. This represented a very significant (129%) increase on 2009’s figure of US$7.3bn. Australia was the second most active country in Asia for financial services M&A with deal volume at US$10.4 billion in 2010. Japan was the third most active hunting ground, with US$8.2 billion of deals last year, down from US$30.6 billion in 2009.

The report also reveals that over 50% of Asia respondents expect it is most likely that they will be involved in a deal over the next 12 months, or that a deal is under consideration for the coming year. In addition, more than 70% of the Asia respondents expect the prospects for FS M&A to either increase slightly or significantly in the next 12 months. Overall, in the medium to longer term, growth in Asian financial services will continue to be driven by a range of supporting economic and demographic factors, including the rapid emergence of middle-income customers.

About the report
The report is based on face-to-face interviews, web and telephonic surveys with 375 senior executives in financial services across 13 Asian territories, conducted during May and June 2011. This was further supplemented by individual client interviews, PwC’s qualitative research and the input of PwC experts in the region.
The deal data has been sourced from Thomson Reuters.
Link : pwc.com/gx/en/mergers-acquisitions-industry-trends/survey/index.jhtml

About PwC - Globally
PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See pwc.com for more information.
"PwC" is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. Together, these firms form the PwC network. Each firm in the network is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way.

About PwC - China, Hong Kong, Singapore and Taiwan
PwC China, Hong Kong, Singapore and Taiwan work together on a collaborative basis, subject to local applicable laws. Collectively, we have more than 620 partners and strength of 14,000 people.
Providing organisations with the advice they need, wherever they may be located, our highly qualified, experienced professionals listen to different points of view to help organisations solve their business issues and identify and maximise the opportunities they seek. Our industry specialisation allows us to help co-create solutions with our clients for their sector of interest.
We are located in these cities: Beijing, Hong Kong, Shanghai, Singapore, Taipei, Chongqing, Chungli, Dalian, Guangzhou, Hsinchu, Kaohsiung, Macau, Nanjing, Ningbo, Qingdao, Shenzhen, Suzhou, Taichung, Tainan, Tianjin, Xiamen and Xi'an.

China: pwccn.com
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Taiwan: pwc.com/tw/en/index.jhtml

2011 PricewaterhouseCoopers. All rights reserved

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