Chinese banks to fuel M&As in financial sector, says E&Y

Chinese banks are expected to fuel growth in Asian financial service mergers and acquisitions (M&A) this year, but could face pricing pressure due to stronger competition between prospective buyers, M&A experts said yesterday.

"There have been a limited number of deals in the past 18 months, but we expect 2010 to be a completely different story with a large number of deals particularly coming from Chinese acquirers," said Keith Pogson, managing partner for Ernst & Young's financial services business.

M&A activities in the financial sector remained limited last year even though financial asset prices were driven down significantly during the global financial crisis. With the financial market continuing to stabilize, Chinese banks, with their relatively better financial position, would look at more overseas M&A opportunities this year.