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Global merger and acquisition deals reached $1.5tn in the first half of 2024, buoyed by a surge in US takeovers and a rise in “megamergers”. The combined value of the deals showed a 22 per cent increase from the previous year, driven by a 70 per cent rise in deals exceeding $10bn, according to data from the London Stock Exchange Group, reported by the Financial Times on Thursday.
Despite the increase in deal value, the total number of deals fell 25 per cent to a four-year low, with smaller takeovers (worth $500mn or less) dropping by 13 per cent in value.
The US led the activity, with deal values rising 43 per cent to $796bn, the highest share of the global market since 2019. Europe also saw a 43 per cent increase in deal value, however the Asia-Pacific region experienced a 21 per cent decline.
Notable deals included Capital One’s agreement to acquire Discover Financial for $33.3bn in February and US oil and gas producer ConocoPhillips’s $22.5bn acquisition of Marathon Oil announced in May. The energy sector saw a 27 per cent rise in deal value, totalling $254bn.
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All 31 of the largest US banks successfully passed the Federal Reserve’s annual stress tests, proving their resilience to a severe recession scenario that included a spike in unemployment to 10 per cent, a 36 per cent decline in house prices, a 40 per cent drop in commercial real estate prices and a 55 per cent equity decline.
The Fed revealed in a statement on Wednesday that its baseline scenario projected nearly $685bn in losses for banks such as JPMorgan, Goldman Sachs and Bank of America, but that they showed sufficient capital to absorb the losses and meet regulatory minimums.
In the release, Michael Barr, the Fed’s vice-chair for supervision said: “This year’s stress test shows that large banks have sufficient capital to withstand a highly stressful scenario and meet their minimum capital ratios.”
“The goal of our test is to help to ensure that banks have enough capital to absorb losses in a highly stressful scenario.”
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Chinese digital lender WeBank has received approval from the Shenzhen Bureau of the National Financial Regulatory Administration to set up a wholly owned Hong Kong subsidiary with a capitalisation of $150mn, as reported by the South China Morning Post on Wednesday. The new unit will be headed by WeBank president Li Nanqing.
The Hong Kong subsidiary will manage WeBank’s overseas business and offer services to countries that are part of China’s Belt and Road Initiative. The new Hong Kong venture was formed to “respond to the country’s strategic policies”, WeBank said in a statement to the Post.
With a valuation of $32.4bn, WeBank is one of the world’s largest fintech unicorns, ranking 10th globally in 2024, according to a recent report published by the Hurun Research Institute. The digital bank reported 2023 revenue of Rmb39.3bn ($5.4bn), an 11.3 per cent increase from the previous year, and a net profit of Rmb10.8bn, up 21 per cent.
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Peter Cai, Citigroup’s head of risk data, analytics, reporting and technology, has become the latest senior executive to leave the bank since its restructuring began in September last year. A spokesperson from Citi confirmed the departure, as reported by Reuters on Wednesday.
Risk and data have been critical issues for Citi, following consent orders from the Federal Reserve and Office of the Comptroller of the Currency to rectify long-term deficiencies within its risk management data governance and internal controls.
Last week, regulators escalated their concerns over Citi’s resolution plan, labelling its “living will” as deficient. Weaknesses in data and controls were cited as factors leading to inaccurate liquidity and capital calculations needed to unwind its derivatives positions in the event of Citi’s bankruptcy. The regulators have said Citi must address these issues by July next year.
