Mergers and acquisitions ( M&A ) activity in financial services across Asia-Pacific recorded modest growth in 2025, with publicly disclosed deals rising 0.8% year on year to 360 transactions, while value surged from US$40.4 billion in 2024 to US$65.5 billion in 2025. The Asean market, however, paints a more nuanced picture, with more deals but smaller tickets, Ernst & Young says in its latest report.

Banking deals in the APAC region dipped slightly from 190 in 2024 to 185 last year, but total disclosed deal value rose from US$31.8 billion to US$45.1 billion.

Insurance activity saw gains in both volume and value. The number of insurance deals increased from 69 to 87, while total deal value climbed from US$6.3 billion to US$11.1 billion.

In the wealth and asset management sector, deal volume fell from 98 to 88 during the period, yet total disclosed deal value surged from US$2.3 billion to US$9.3 billion, indicating a handful of sizeable transactions.

Asean shifts to smaller deals with strategic focus

In the Asean region, financial services M&A deal volume grew from 48 transactions in 2024 to 58 last year, but total disclosed deal value fell by half from US$4.2 billion to US$2.1 billion over the same period, according to the report.

“While deal volume has increased year on year, total deal value across Southeast Asia has dipped, signalling a move towards smaller acquisitions and minority investments over larger, more transformative deals,” says EY Asean financial services leader Sumit Narayanan. “High funding costs and valuation gaps between buyers and sellers have made it harder to pursue mega deals. Greater regulatory and capital scrutiny has also made firms more cautious.”

The prevailing strategy among financial institutions is to pursue targeted investments that enhance digital capabilities. “Many are focusing on investments that enhance their capabilities in areas such as digital services, payment solutions and wealth management. This reflects a more disciplined, risk-adjusted growth strategy amid macroeconomic and geopolitical uncertainties,” Narayanan adds.

Within the Asean market, banking deals edged up from 32 in 2024 to 35 last year, but total disclosed deal value declined from US$2.3 billion to US$1.2 billion during the period.

Insurance deals fell slightly from 12 to 11, while value dropped from US$1.6 billion to US$0.8 billion.

Wealth and asset management saw deal volume triple from four to 12, yet total disclosed deal value contracted sharply from US$300 million to US$28 million, reinforcing the broader regional trend toward smaller, minority investments.

Foreign interest in Southeast Asian targets moderated. The number of non-Asean firms acquiring Asean-based targets declined from 31 in 2024 to 24 in 2025, with total disclosed deal value falling from US$4.2 billion to US$700 million.

Similarly, Asean firms pursuing overseas acquisitions decreased from 16 to 10, and total disclosed deal value dropped from US$1.1 billion to US$0.1 billion.

“Southeast Asia continues to be an attractive region for businesses and investors given its economic growth, diverse market dynamics and innovation in financial services,” says Stuart Last, EY-Parthenon partner, financial services, Ernst & Young Solutions LLP. “Singapore, as a regional hub for financial services, is expected to drive increased deal activity in 2026, particularly in the insurance, and wealth and asset management sectors. Further, in the fintech sector, we expect to see profitable regional platforms building towards IPOs in the medium term but with interim funding rounds anticipated in the coming years.”