Global investment banking fees fall 8% in 2015

(FILES) This August 8, 2013 file photo shows a JPMorgan outside the office tower housing the financial services firm's Los Angeles,California offices. US regulators fined JPMorgan Chase $307 million on December 18, 2015 for failing to disclose conflicts of interests to clients when it recommended proprietary investment products over third-party options.From 2008-2013, JPMorgan failed to make clear to investment clients numerous conflicts of interests, including its preference for JPMorgan-managed mutual funds over other funds, according to the US Securities and Exchange Commission (SEC).AFP PHOTO / ROBYN BECK

LONDON: Global investment banking fees fell 8% in 2015 compared to a year earlier, with a boom in mergers and acquisition activity failing to offset a slump in equity and debt capital markets fees, Thomson Reuters data published on Tuesday showed.

Global fees for services ranging from merger and acquisitions advisory to capital markets underwriting totalled US$86.9bil (RM377.5bil) in 2015, the lowest annual figure since 2013.

Regionally, fees in Europe declined 16% compared with a year ago, Asia-Pacific fees fell 12% and fees from the Americas were down by a more modest 3%.

One bright spot was mergers and acquisitions (M&A), where fees from completed activity rose 8% year-on-year, as worldwide M&A in 2015 rose 42% to US$4.7 trillion (RM20.4 trillion), the strongest year for deal making on record.

Investment banking income was dragged down by a 13% decline in equity capital markets fees compared to a year ago, and an 18% decline in debt capital markets fees as global markets were hit by volatility sparked by global growth worries, geopolitical tensions in the Middle East and a China slowdown.

JPMorgan topped the global league table for fees, drawing in US$5.98bil (RM25.98bil) during the year, down 7.5% compared to a year ago, but maintaining 6.9% of the overall wallet share.

The top five banks were all American, with Goldman Sachs  the only one in the top five to increase its fees intake for the year, up 6.9% to US$5.94bil (RM25.8bil).

Europe’s biggest investment banks continued to lose market share, with Deutsche Bank, ranked sixth, seeing a 20% year-on-year decline in fees to total US$3.45bil (RM14.99bil), or a 0.6% decline in the wallet share.

Credit Suisse saw a 13.9% decline in fees to US$3.32bil (RM14.52bil) and Barclays a 11.2% decline to US$3.29bil (RM14.3bil). - Reuters