Chinese mainland financial firms will likely be the most active in merger and acquisition activities in Asia despite the United States credit crisis, an industry survey said Tuesday.

Asian firms are undaunted by the credit crisis and 40 percent of respondents believe the credit crisis will actually increase the volume of M&A, PricewaterhouseCoopers said today in a survey.

The figure rose to 50 percent on the Chinese mainland for possible mergers and acquisitions this year. The figure increased to 71 percent when talking about possible M&A activities in five years, the accounting firm said.

The US subprime crisis led to sizable write-downs among big-name financial players like Citigroup and UBS. However, it also created opportunities for companies with ample capital to buy stakes at relatively lower valuations in firms mired in the crisis.

More M&A cases are expected this year on the Chinese mainland though the value of deals may drop, PwC said.

"The cross-industry M&A activities are a trend as financial players are seeking to grow as an all-around financial institution," said Nelson Lou, a PwC partner.

More M&A activities are likely in the retail banking sector, among brokerages, asset management companies and private banking, the report said.

In the first quarter of this year, about 70 percent of financial M&As were made in trust and fund industries, with the remaining in the banking and insurance industry.

The findings were based on a survey of 281 senior executives in Asia with 22 percent of respondents on the mainland and Hong Kong.

The Chinese mainland is the second biggest active market in Asia for financial services M&As with deals valued at US$16.2 billion in 2007, up from US$11 billion in 2006.

About 86 percent of respondents on the mainland said their institution had been involved in an M&A deal in the past three years.

(Shanghai Daily May 13, 2008)