Analysis-U.S. banks to pounce on fintech deals as valuations plunge

The skyline is seen in Manhattan, New York City, U.S., August 21, 2021. REUTERS/Andrew Kelly

NEW YORK (Reuters) - Financial technology companies, long seen as a threat by the likes of JPMorgan Chase & Co, are increasingly becoming acquisition targets for traditional U.S. banks as rising interest rates and falling valuations crimp their expansion.

The valuations of listed financial technology firms have plunged 70% in 2022, analysts at Jefferies Group said in a note last week. In the same period, the valuations of banks in the S&P 500 are down 33%, while valuations for the S&P 500 are down 23%, according to data from Refinitiv IBES.