Wednesday, 6 July 2016

Global Investment Banking Review H1 16 - some big losers

Global Investment Banking Fees Total US$37.1 billion; Slowest First Half for IB Fees since 2009; Americas and Europe Decline 26%

Fees for global Investment Banking services, from M&A advisory to capital markets underwriting, totaled US$37.1 billion during the first half of 2016, a 23% decrease over last year at this time and the slowest first six months for fees since 2012. Fees in the Americas totaled US$19.9 billion, down 26% compared to the first half of 2015 while fees in Europe also decreased 26% and Asia Pacific fees decreased 10%. Fees in Japan decreased 19% compared to a year ago, while fees in Middle East/Africa also decreased 19% compared to first half 2015 levels.
JP Morgan Takes Top Spot for Global Investment Banking Fees; Top 10 Firms Register Combined Wallet Share Loss of 2.2 Points
JP Morgan topped the global investment banking league table during the first half of 2016 with US$2.6 billion in fees, or 7.0% of overall wallet-share. Goldman Sachs booked US$2.4 billion in fees during the first half of 2016 for second place, while Bank of America Merrill Lynch moved into third place from fourth a year ago. The composition of the top ten banks remained unchanged, with seven firms moving rank position compared to a year ago. Within the top 10, Goldman Sachs and Deutsche Bank saw the steepest wallet share declines with losses of 0.7 and 0.6 wallet share points, respectively.
Consumer Staples IB Fees Register 23% Increase; Healthcare and Telecom Fees Post Steepest Declines
Investment banking activity in the financials, energy & power, industrials and technology sectors accounted for 58% of the global fee pool during first half 2016. JP Morgan topped the fee rankings in six sectors during the half, with double-digit wallet-share in the technology and telecom sectors. Fees from deal making in the consumer staples sector increased 23% compared to a year ago with Bank of America Merrill Lynch commanding 9.0% of all fees booked in the sector during the first half. Healthcare and telecom fees registered the steepest percentage declines this half, down 49% and 42%, respectively.
Financial Sponsor-related Fees Down 40%; Carlyle Group, Barclays Tops Financial Sponsor Fee Rankings
Investment banking fees generated by financial sponsors and their portfolio companies reached $3.9 billion during the first half of 2016, a decrease of 40% compared to 2015. Fees generated from leveraged buyouts accounted for 29% of financial sponsor-related fees during the half, while ECM exits accounted for 10% and M&A exits comprised 23% of overall fees. The Carlyle Group and related entities generated $222 million in investment banking fees this year, down 1% compared to the first half of 2015, while Barclays collected an industry-leading 7.0% of financial sponsor-related fees during the first half.
IPOs Pull Equity Capital Markets Fees Down 43%; Debt Capital Markets Fees Down 11%, while M&A Fees Decline 15%
Dragged down by a 57% decrease in fees from IPOs, equity capital markets underwriting fees totaled US$7.3 billion during first half 2016, down 43% from a year ago. Fees from debt capital markets underwriting totaled US$11.4 billion, down 11% compared to last year's tally and accounted for 31% of overall IB fees during the first half of 2016. M&A advisory fees totaled US$11.5 billion during first half 2016, a decline of 15% compared to the same period last year, and accounted for 31% of the global fee pool, while fees from syndicated loans decreased 24% compared to the first half of 2015.

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