US Banking Sector Poised for New Wave of M&A Activity, Research Finds

Wesley BrownUpdated June 17, 20251 Mins read165 Views

As recession fears fade and regulators ease rules, analysts expect banking M&A activity to accelerate in the second half of this year.

US Banking Sector Poised for New Wave of M&A Activity, Research Finds — A combination file photo shows UBS, Citibank, Morgan Stanley, Blackrock, JPMorgan Chase, and Goldman Sachs from Reuters archive. Reuters

6/17/2025|Updated: 6/17/2025

Following the near collapse of the U.S. housing market and the financial crisis of 2008–09 that triggered the Great Recession, merger and acquisition (M&A) activity in the banking sector surged after a record number of banks insured by the Federal Deposit Insurance Corporation (FDIC) failed between 2008 and 2013.

A June 9 research report from Wall Street investment banking giant Morgan Stanley suggests the U.S. banking sector may be entering a new wave of M&A activity as fears of a recession dissipate and regulators take a more favorable stance.

This represents a turnaround from the pandemic environment in 2021, when U.S. banking M&A deals fell from a historical average of 200–300 per year to 100–150, due to stricter regulations.

“We believe bank M&A would have already picked up had it not been for the elevated uncertainty brought about by the recent tariff announcements,” says Manan Gosalia, Morgan Stanley’s head of U.S. Midcaps Banks Research.