UK financial services first-half M&A value rises eight-fold in 2026

M&A transactions in the UK financial services sector rose significantly in the first half of 2026, according to new data from EY. Amid a 25% year-on-year increase in announced or completed deals, and a marked eight-fold increase in deal value, the analysis showed that the market had continued with its recovery from the end of 2025.

Many markets struggled earlier in 2025, thanks to unpredictable economic and geopolitical conditions. In the UK, the mergers and acquisitions (M&A) market for the first half of 2025 recorded a total deal value of £57.3 billion – something PwC research suggested was a 12.3% decline compared to £65.3 billion in the same period last year.

However, pent-up demand, stock market highs and steady interest rates fuelled a surge in M&A activity that led to a strong finish to 2025. And going into 2026, the market were said to be turning a corner, particularly in the financial services sector, according to analysis from EY in January.

Now, the Big Four firm has followed this up with its analysis of the UK’s M&A market for the first half of the year. And according to EY, things have continued to improve – with UK banks, insurers and asset managers publicly disclosing 135 transactions between January and the end of June 2026, compared to 108 deals in the first half of last year.

Total disclosed value for UK financial services deals rose significantly from £4.2 billion in the first six months of 2025 to £33.7 billion in 2026. Meanwhile, seven deals exceeded £1 billion in value (including two megadeals between £8 billion and £10 billion), representing approximately 93% of total deal value, up from two deals above £1 billion in the same period of 2025.

Post-Brexit boom

A decade on from Brexit, much has been made of the impacts of the UK’s divorce from the EU. According to EY, one area where trade has actually improved is the UK financial services M&A segment. Over the past decade, dealmaking in the UK’s financial services sector has fluctuated annually, with overall volume trending up. The first-half deal volumes now seen are 93% higher than they were in 2017 (when 70 total deals reported) and deal value has more than doubled (from £10.1 billion).

So, what is driving this? According to EY, enhancing technology or AI capabilities was identified as the most important driver of these decisions. With the UK still positioning itself to be a leader in AI services, 25% of investors told EY they ranked technology access it as their top priority, ahead of strategic fit with long-term growth priorities and return on invested capital.

Damian Hourquebie, EY UK financial services strategy and transactions leader, commented, “It’s been a strong first half for UK financial services dealmaking, with overall transaction value significantly higher compared to last year, and more than double what it was a decade ago. Market confidence has been supportive, with continued focus on strategic consolidation to bolster revenue growth, innovation, and transformation. While geopolitical and economic uncertainty remains, the strength of activity across H2 2025 and H1 2026, alongside the prioritisation of tech and capability-led M&A, suggests UK financial services leaders are making bold, strategic decisions to support sustained growth amid market challenges.”