Financial institutions M&A: Sector trends - February 2020
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Brokers/Corporate Finance

Financial institutions M&A sector trends: brokers/corporate finance — H2 2019 and outlook for 2020

Household names turn to M&A as market disruption from fintechs offering commission-free trading continues.




  • Consistent; upward


  • Household names opt for growth through:
    • Inorganic strategies (e.g., Rothschild's acquisition of Livingstone's UK business and equity investment in Redburn)
    • Organic strategies (e.g., BAML's Emerging Growth & Regional Coverage division, UBS Private Capital Markets division and ICAP's Digital Asset Markets division)
  • Flurry of new entrants offering user-friendly online stock trading services (e.g., Lunar, Robinhood, Freetrade, Revolut, etc.)


  • Trade consolidators:
    • Experiencing declining revenues—pressure from unbundling of equity research costs under MiFID II, in already over-brokered financial centres
    • Seeking scale and scope/specialist industry expertise
  • High buyer appetite:
    • US investors leveraging strength of the US dollar (e.g., INTL FCStone's acquisition of Exotix)
    • Asian investors seeking diversification (e.g., Concordia's 49.9% stake in Stormharbour Securities and Bank of China's acquisition of Goodbody)
  • Pressure from commission-free trading offerings:
    • Availability of growth funding from financial sponsors (e.g., Draper Esprit's investment in Freetrade and Velocity Capital's investment in BUX)
    • Tech-savvy customers respond to user-friendly on-demand access to global markets


  • Brokers going head-to-head with McKinsey, Bain and BCG in their search for new research customers
  • Recalibration of mid-market investment banking business models—focus on private capital solutions, industry/sector specialisms and online offerings 


Market consolidation is likely to continue in the short term as brokers recalibrate their offerings to retain market share, in a sector beleaguered by transformational regulation, fintech disruption and unfavourable market conditions.


Publicly reported deals & situations

Buyer appetite

  • INTL FCStone: Acquisition of Exotix Partners (December 2019)
  • Concordia Financial Group: Acquisition of 49.9% of StormHarbour Securities (November 2019)
  • Bank of China: Acquisition of Goodbody Stockbrokers (November 2019)
  • Renta 4 Banco: Acquisition of BNP Paribas Personal Investors (September 2019)


Search for alternative revenue


  • BAML: Launch of BAML Emerging Growth & Regional Coverage (July 2019)
  • UBS: Launch of UBS Private Capital Markets (July 2019)
  • ICAP: Launch of Digital Asset Markets (June 2019)


  • Dierickx Leys: Acquisition of Lawaisse (December 2019)
  • TP ICAP: Acquisition of Louis Capital (December 2019)
  • flatex Bank: Acquisition of DeGiro (December 2019)
  • GTS: Acquisition of Barclays' equities automated options trading assets (December 2019)
  • BNP Paribas Securities Services: Acquisition of strategic stake in AssetMetrix (November 2019)
  • Houlihan Lokey: Acquisition of Fidentiis Capital (November 2019)
  • Rothschild: Acquisition of Livingstone's UK business (October 2019)
  • Arkios Italy: Acquisition of 51% of Integrae Sim (October 2019)
  • Banca Valsabbina: Acquisition of 26% of Integrae Sim (October 2019)
  • Rothschild: Acquisition of minority stake in Redburn (July 2019)


Mounting pressure:

  • Lunar (Online trading): Launch of online stock trading feature (December 2019)
  • Robinhood (Online trading): Launch of commission-free stock trading in the UK (November 2019)
  • Freetrade (Zero-commission stock trading): Successful US$15 million Series A funding round, led by Draper Esprit (October 2019)
  • Revolut (Mobile trading): Launch of commission-free stock trading (August 2019)
  • BUX (Mobile trading): Successful US$12.5 million Venture funding round, led by Velocity Capital and Holtzbrinck Ventures (June 2019)


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Financial institutions M&A: Sector trends

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