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EMEA’s share of investment banking fees hits all-time low

Fees for services ranging from M&A advisory services to capital markets underwriting in EMEA total $18b so far in 2016, down 12% year-on-year

Gulf News

London: Investment banking fees earned in Europe, the Middle East and Africa (EMEA) account for just 24 per cent of the global total so far this year, the lowest year-to-date share since records began in 2000, Thomson Reuters data shows.

Fees for services ranging from merger and acquisitions (M&A) advisory services to capital markets underwriting in EMEA total $18 billion so far in 2016, down 12 per cent year-on-year.

At its zenith in 2008, the EMEA fee pool accounted for 37 per cent of global investment banking fees earned, the data shows.

Britain’s vote to leave the European Union in June and the ensuing uncertainty, a looming referendum on constitutional reform in Italy as well as a prolonged period of anaemic growth across Europe have put companies off pulling the trigger on large scale M&A deals, a big fee earner for banks.

European M&A activity totals $554 billion (Dh2.03 trillion) so far this year, down 30 per cent on the same period in 2015, with M&A in Britain down 69 per cent, lagging a 19 per cent fall in worldwide activity, according to the data.

Britain is the third-highest fee paying country so far this year, accounting for 6 per cent of the global fee pool, behind the United States and China with 45 per cent and 12 per cent respectively.

Broadly flat

European equity capital markets activity is also down 36 per cent to total $133 billion, lagging a worldwide drop of 26 per cent, while debt capital markets activity is broadly flat in Europe but up 15 per cent worldwide.

Global investment banking fees are down 11 per cent so far this year compared with 2015, totalling $74 billion, with fees from the Americas falling 17 per cent to $38 billion accounting for 52 per cent of the global total, a 5-year low.

Fees in Asia, however, are up 5 per cent this year to $17.3 billion, the highest year-to-date total since Thomson Reuters records began in 2000, and now account for 23 per cent of the global feel pool, up from a low of 10 per cent in 2001.

US banks are in the top five positions in the global investment banking fee rankings with a 28.6 per cent share, down from a high of 44.3 per cent in 2001.