M&A activity in Thailand's financial services (FS) sector is off to a slow start this year, says PwC Thailand. Ongoing riskslike a sluggish economy, political uncertainty and trade barriersare making businesses cautious.
Thai companies are holding back on acquisitions until they get a better read on the situation, according to Phuwin Norchoovech, Deals Partner at PwC Thailand. Deals in the first half of 2025 are down compared to last year, and this trend is expected to continue.
"Higher funding costs globally, tariffs and adapting to the next revolution of AI are all key challenges, causing many dealmakers to wait for more stability before making big moves this year.
"Even though the Bank of Thailand manages the local benchmark interest rate relatively low, M&A in Thailand's FS sector probably won't pick up much in the second half of the year. There are just too many headwinds right now," Phuwin said.
He added, "Uncertainty about the economy and local politics is making businesses across many sectorsnot just financial serviceshold off on making big moves until they have a clearer picture."
For banks, issues like slow economic recovery, high household debts, rising bad loans, and new branchless banks are reshaping the financial market. Securities companies are facing significant headwinds during this bearish stock market, making force selling from margin loans a topic of discussion. Brokerages are competing with digital newcomers, making M&A a possible strategy, Phuwin said.
The insurance sector is continuing to adapt, driven by more competition and new regulations, such as co-payments for health insurance and the evolving electric vehicle (EV) insurance market. Some insurers are turning away certain EV models in the short run because of higher claim costs, which could put pressure on business and scale, leading to consolidation of subscale insurers, he said.
According to PwC's Global M&A Trends in Financial Services: 2025 Mid-year Outlook, FS deal volume fell by 1% to 2,313 in the first half of 2025 compared to 2,340 a year prior. Deal values rose 15% in the first half of 2025even though there were slightly fewer deals. Bigger deals (megadeals) are leading the way, with ten deals over USD5bn compared to six last year.
The three largest FS deals in the first half of this year included Global Payments' proposed USD24.25bn acquisition of Worldpay, Monte dei Paschi di Siena's USD13.9bn bid for Mediobanca and FIS' planned USD13.5bn purchase of Global Payments' Issuer Solutions business, PwC data showed.
Regionally, in the first half of 2025 compared to the first half of 2024, deal volume remained flat in Europe, the Middle East and Africa (EMEA) and the Americas. In Asia Pacific, deal activity dropped by 4%. Each region made up about a third of all deals worldwide. Deal values held steady in the Americas but declined 15% in Asia Pacific, the data showed.
Embrace agile strategies and team up with fintechs
In light of the current climate, Thai FS companies should rethink their strategies and how M&A activities can enable the capabilities outside their expertise, especially when it comes to technology.
Instead of just building their own solutions or buying up other businesses, companies are encouraged to partner with startups and platform to embed financial services in the ecosystem be it digital payments, onboarding, lending or wealth management tech.
"Working with these tech start-ups and platforms allows big companies to bring in fresh ideas and new technology faster. That means smoother operations, better digital tools and capabilities, and a better experience for customers. It also makes transactions easier, quicker and more convenient.
"In the current age of M&A, it's not about buying and selling. Partnership and strategic alliances are trending," Phuwin said.
"Big FS companies need to stay flexible and ready for change. Leaders should keep an open mind and be willing to switch things up when the economy, politics or technology shifts. Being agile gives them a real advantage in today's fast-changing world," he said.