Banking M&A Digest #96 (15.10.2020)

Posted by

Corporate Financier’s Notes by Aivars Jurcans

Done! And Done

Capital Group, a US investor, has increased its stake in Deutsche Bank now owning a total of less than 5% of shares. 

Source: Reuters

The Indonesian state-owned lenders PT Bank Mandiri, PT Bank Negara Indonesia and PT Bank Rakyat Indonesia have agreed to combine their Shariah-compliant units. The merged entity’s assets are expected to amount to USD 15 billion and could reach USD 26 billion by 2025.

Source: Bloomberg

National Commercial Bank, a Saudi Arabia’s lender, has entered a binding merger agreement with Samba Financial Group, a smaller rival. The deal is expected to create a combined entity with USD 223 billion in assets. 

Source: Reuters

The London Stock Exchange Group has agreed to sell Borsa Italiana, the owner of Milan stock exchange, to Euronext, a rival, for EUR 4.3 billion. The transaction is contingent on the EU’s regulatory approval of LSE’s USD 27 billion acquisition of Refinitiv, a data and trading group.

Source: FT

TP ICAP, aa UK broker, has agreed to buy Liquidnet, a US equities trading business, in a USD 575 million deal (potentially to increase to USD 700 million depending on other payouts and performance targets).  

Source: FT

Morgan Stanley has agreed to buy Eaton Vance, an investment manager, in a deal worth USD 7 billion in cash and shares. The deal will add USD 500 billion to the Morgan Stanley Investment Management’s assets increasing them to USD 1.2 trillion. 

Source: FT

Deals On The Table

UniCredit, an Italian lender, is said to be studying a possible separation of its domestic and foreign operations. The asset split could ease tie-ups, potentially paving the way to pursue an international merger for its foreign business and a domestic combination in Italy.

Source: Reuters

Ngern Tid Lor, a Thai micro-finance company controlled by Bank of Ayudhya, is said to be exploring an IPO that could potentially raise as much as USD 1 billion. Its net income in 2019 amounted to USD 71 million.

Source: Bloomberg

Citadel Securities, a market maker which oversees daily trading in more than 1,500 NYSE listed securities, is said to be planning to buy the market-making unit of IMC Financial Markets, a smaller rival. The terms of the expected deal were not disclosed. 

Source: Bloomberg

Lufax, a Chinese online lending platform, is said to be planning a US IPO where it may seek to raise up to USD 3 billion. The business, controlled by Ping An Insurance, was valued at USD 39.4 billion in a funding round in early 2019.

Source: FT

Thanks, But No Deal

Guolian Securities, a China’s brokerage, has ended its effort to buy Sinolink Securities, a bigger rival, after “the firms couldn’t agree on terms”. The deal was expected to create a USD 13 billion Chinese broker.

Source: Bloomberg

Metrics To Watch

Bank of America’s net interest margin – the difference between the bank’s funding costs and its lending yields – was 1.7% in Q3 2020, down from 2.4% the year before.

Source: FT

Goldman Sachs’s annualised return on equity of 17.5% for the 3 months to the end of September was its highest quarterly return in a decade.

Source: FT

Citigroup’s shares are trading at 0.6x times the book value of the bank’s net assets.

Source: FT

Danske Bank’s, a Danish lender, cost-to-income ratio has increased reaching 65.7% in H1 2020, while the bank aims to have this ratio down to the low-50% range and to target a return of equity of 9% to 10% by 2023. Its return on equity in H1 2020 was 0.9%, down from 9% a year earlier.

Source: FT

The Money Trail

Warburg Pincus, a US private equity firm, has invested USD 100 million in a series A round in Take Blip, a Brazilian startup, that helps companies engage with clients via messaging apps. Founded in 1999, Take Blip expects to post revenues of USD 40 million in 2020.

Source: Reuters

Up-and-Comers

Wealthsimple, a Canadian startup that pitches itself as a low-fee way to invest through its robo-advisory services and commission-free stock trading, has closed a USD 87 million funding round that values it at more than USD 1 billion. 

Source: Bloomberg

N26, a Berlin-based neobank, is said to be considering a fresh funding round in 2021 at an expected valuation above USD 3.5 billion. 

Source: Bloomberg

Exciting Numbers

The total value of China’s stock market has climbed to a record high of more than USD 10 trillion.

Source: FT

A Thought Worth Noting

“The bigger question is, given we know only a small proportion of the population is subject to symptomatic infection and an even smaller cohort mortality risk, whether the risks of mass vaccination relative to focusing on improving hospital treatment is really worth it.”

Barry Norris, chief investment officer, Argonaut Capital

To receive your personal weekly copy of Banking M&A Digest please subscribe at http://eepurl.com/gepqdP

Aivars Jurcans has more than 20 years of corporate finance and investment banking experience. His services are currently available through MURINUS ADVISERS.

Design by Artis Briedis, Photo by Joe Taylor on Unsplash

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s