The latest analysis of the UK financial services industry by Ernst & Young Financial Services shows that M&A transactions increased significantly in the first half of 2026, with announced or completed transactions increasing by 25% year-on-year, and transaction value increasing eightfold.
The total disclosed value of UK financial services transactions increased to £33.7bn in 1H26, compared with £4.2bn in 1H25, with 7 transactions worth over £1bn.
There were two large deals of between £8 and £10bn, accounting for around 93% of the total deal value, up from two deals in excess of £1bn in the first half of 2025.
Additionally, UK banks, insurance companies and asset managers publicly disclosed 135 transactions in the first half of 2026, compared with 108 last year.
The Ernst & Young report said, “Deal volume in the UK financial services industry has fluctuated annually over the past decade, with overall deal volume trending upward. Deal volume in the first half is now 93% higher than in 2017 (a total of 70 reported deals), and deal value has more than doubled (from £10.1 billion in 2017).”
Enhancing technology or artificial intelligence (AI) capabilities was the top priority for most such deals, with a quarter of participants ranking it ahead of strategic fit, long-term growth priorities and return on invested capital.
While transaction volume was slightly lower at 141 transactions in the second half of 2025, the value of disclosed transactions increased to £33.7 billion from £27.9 billion in the first half of 2026, and momentum is expected to increase further in the second half of 2026.
95% of UK financial services CEOs expect their organization’s interest in M&A to increase in 2026 compared with 2025, according to the latest EY UK Financial Services CEO Outlook.
Judging from the data, UK wealth and asset management transactions increased from 47 in the first half of 2025 to 61 this year, with transaction value increasing significantly from £200 million to £22.7 billion.
In the first half of 2026, insurance transactions increased from 40 to 55, with the value rising significantly from £1.6 billion to £8.4 billion during the same period.
Deals in the banking and capital sector fell slightly from 21 in H1 2025 to 19 in H1 2026, while value increased slightly from £2.4 billion last year to £2.5 billion in H1 2026.
The number of non-UK companies acquiring UK targets fell from 40 in H1’25 to 36 this year, while the total number of disclosed deals rose from £4.1bn in H1’25 to £27.2bn in H1’26.
At the same time, the number of British companies acquiring overseas targets decreased from 37 in 1H25 to 34 currently, and the value increased from 600 million pounds in 1H25 to 2.6 billion pounds in 1H26.
Damian Hourquebie, EY UK Financial Services Strategy and Transactions Leader, commented: “UK financial services trading has had a strong first half, with overall deal value improving significantly on last year and more than double what it was a decade ago. Market confidence has been supported by continued focus on strategic integration to drive revenue growth, innovation and transformation.
“While geopolitical and economic uncertainty remains, strong activity in the second half of 2025 and the first half of 2026, coupled with the prioritization of technology and capabilities-led M&A, demonstrates that UK financial services leaders are making bold strategic decisions to support continued growth amid market challenges.”
Ari Constantinou, EY UK Financial Services Transformation Leader, added: “Wealth and asset management continues to be one of the most active areas for high-value M&A in the UK financial services industry, with investors attracted by the sector’s long-term growth potential and expansion opportunities.
“While scale remains a key driver of dealmaking, we are increasingly seeing companies using M&A to accelerate business transformation – expanding advisory capabilities, strengthening private markets offerings, accessing new client segments and enhancing digital investing capabilities. In this environment, M&A is increasingly being used not just to gain scale but to accelerate transformation.”
