Asia-Pacific banks, brokerages, insurers and private equity firms are more optimistic about mergers and acquisitions as they seek to expand following a decline in asset prices, according to PricewaterhouseCoopers LLP (PwC).
About 42 percent of financial institutions in the region expected to make an acquisition over the next year, compared with 38 percent a year earlier, according to a PwC survey of 215 senior executives conducted in January and last month. Still, 83 percent of the respondents expected the global credit crunch and economic slump to last for another one to two years.
Financial firms in China and Australia are more confident than rivals in other regions because of their “comparatively stronger balance sheets and lower levels of outbound M&A activities in recent years, which has left them in a stronger position to weather the storm,” said Nelson Lou (盧玉彪), a Beijing-based partner at PwC.
Chinese banks posted a 31 percent increase in combined profit last year and will continue to outperform overseas rivals, Liu Mingkang (劉明康), chairman of the China Banking Regulatory Commission, said last month. China’s three largest banks held a total of US$570 billion in cash and cash equivalents as of Sept. 30.
US and European rivals, by comparison, have led the world’s biggest banks, brokerages and insurers in reporting US$1.26 trillion in losses since the US subprime-mortgage market collapsed, data compiled by Bloomberg show.
About half of the PwC survey’s respondents in China expected asset prices to reach a bottom over the next six months, and 42 percent planned to expand into new markets.
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