European bank M&A tracker: Deal activity falls 36% in 2023

European banks were unable to avoid the global dealmaking drought in 2023, with M&A involving lenders falling 36% year over year, S&P Global Market Intelligence data shows.

There were 188 transactions among European banks last year, down from 294 in 2022 and 367 in 2021. The fourth quarter, typically the busiest of the year for M&A, was the weakest three-month period in 2023 with just 40 deals.

Rising interest rates made financing acquisitions more expensive last year, while the lack of progress in Europe's banking and capital markets unions has also dented the appeal of cross-border consolidation. M&A activity was muted across sectors and geographies. In European real estate, for example, dealmaking hit a 13-year low, Market Intelligence data shows.

UBS Group AG's €3.3 billion rescue of Credit Suisse Group AG was the largest European banking deal in 2023. The combination of two of Switzerland's biggest financial institutions will require an arduous integration process that has already sparked thousands of job cuts.

Nordea Bank Abp's purchase of Danske Bank A/S' personal customer and private banking business in Norway was the second biggest deal in the space. Danske put the operations up for sale as part of a wider strategy overhaul. The deal increases Nordea's share of the Norwegian mortgage market to about 16% from 11% and is the latest in a series of deals it has made in Norway in recent years.

Other notable deals during the year included the take-private of French investment bank Rothschild & Co. SCA by entities linked to the founding family, and Deutsche Bank AG's acquisition of UK broker and advisory house Numis Corp. PLC.

– Access the deal profile page for the UBS-Credit Suisse transaction. – View UniCredit's detailed M&A history. – Pull M&A data using the screener tool.

Italian lender UniCredit SpA was responsible for the biggest deals of the fourth quarter. In a pair of related transactions, UniCredit bought a 9% stake in Greek lender Alpha Services and Holdings SA for €293.5 million, and the two banks combined their Romanian operations in a €300 million deal.

UniCredit has handed back billions of euros to shareholders over recent quarters, in part due to the bank's inability to find attractive takeover targets. "For the time being and for the foreseeable future, this is the best alliance we could think of," CEO Andrea Orcel said following the Alpha tie-up.

UniCredit's domestic rival Intesa Sanpaolo SpA was also active in Romania during the fourth quarter, acquiring First Bank SA, a lender with 40 branches and about €1.5 billion of assets, from US private equity firm J.C. Flowers & Co. LLC.