SNL Securities Data on Deal Activity Reveals Weakness Among Banks, Thrifts

The level of deal activity in the financial services sector for the second quarter saw the best of times and the worst of times, according to data compiled by SNL Securities.

One area—securities brokerage and investment advisers — rode high, while another—banks and thrifts—sunk low, and the rest—specialty finance and insurance—were a mixed bag.

The knockout quarter for securities brokerage and investment adviser deals was highlighted by foreign acquisitions of U.S. companies. The largest deal, though, came from Chase Manhattan Corp., which paid $6.92 billion for London-based merchant bank Robert Fleming Holdings Ltd.

On the other side of the tracks, bank and thrift activity saw its lowest quarter in number of deals in nine years. Deal value of about $5.8 billion, which was below the first quarter of the year but above the fourth quarter of 1999, was made to look better by the $2.8 billion Wells Fargo acquisition of First Security.

Deal activity in the insurance industry remained slow in the second quarter, although rising stock prices among some of the industry’s top players could spur more deals later this year. Interestingly, property & casualty deals, which have traditionally been dominant in the insurance M&A field, fell slightly in the quarter compared to last year, while the number of announced life and health deals increased from the second quarter of last year.

Goldman Sachs & Co. stayed atop the adviser rankings, and year-to-date is number one in both number of deals and deal value, replacing 1999 champ Donaldson Lufkin & Jenrette in the latter category. DLJ, in fact, dropped to fifth in the rankings in deal value YTD, and to seventh in number of deals, compared to its 1999 rank of third.