Wednesday 15 July 2020

Investment banks have slowest first half since 2012

LONDON, July 5, 2016

By Anjuli Davies

Global investment banking fees fell by nearly a quarter in the first half of 2016 from a year earlier as market volatility hit capital markets and M&A deal making, Thomson Reuters data published on Monday showed.

Global fees for services ranging from merger and acquisitions advisory services to capital markets underwriting fell 23 per cent to $37.1 billion at the end of June, the slowest first half for fees since 2012.

While 2015 was a record year for M&A, 2016 is shaping up to be a record year for 'broken' deals, as the United States flexes its antitrust muscle and seeks to crack down on deals that aid tax avoidance or risk harming national security.

Coupled with market volatility triggered by Britain's vote to leave the European Union, this has dented some of the confidence required by corporate boards to approve deals and companies to push the button on capital markets activity.

Equity capital markets fees saw the steepest decline of 43 per cent compared to a year ago to total $7.3 billion, dragged down by a 56 per cent drop in fees from initial public offerings.

Fees from underwriting bond deals fell 11 per cent to $11.4 billion and M&A revenue declined 15 per cent to $11.5 billion, compared to a year ago.

Regionally, fees in the Americas totaled $19.9 billion, down 26 per cent from last year. Fees in Europe were also down 26 per cent at $8.4 billion and the Asia-Pacific region saw a 10 per cent decline to $6.7 billion.

JPMorgan topped the global league table for fees, pulling in $2.6 billion during the first half, a decline of 23 per cent compared to a year earlier, followed by Goldman Sachs and Bank of America Merrill Lynch. – Reuters

Tags: investment banks | mergers | underwriting |

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