Thomson Reuters Review - 2012 Investment Banking Fees

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Global Investment Banking Fees Total US$74.8 billion, down 3% from 2011; Slowest Annual Period since 2009; Europe IB Fees Fall to 8-Year Low

Fees for global Investment Banking services, from M&A advisory to capital markets underwriting, totaled US$74.8 billion during full year 2012, a 3% decrease over last year at this time and the slowest period for investment banking fees since 2009. Fourth quarter investment banking fees totaled US$20.7 billion, an increase of 13% compared to the third quarter of 2012. Fees in Europe totaled US$17.1 billion, a 17% decrease from 2011 while fees in Asia Pacific decreased 18%. Fees in the Americas increased 6% compared full year 2011, while fees in Japan increased 18% over 2011 levels.

JP Morgan Retains Top Global Investment Banking Fees Ranking; RBC Capital Markets, Citi, Barclays & Wells Fargo Lead Wallet-share Gains

JP Morgan topped the global investment banking league table for full year 2012 with US$5.6 billion in fees, or 7.5% of overall wallet- share. Bank of America Merrill Lynch booked US$4.9 billion in investment banking fees during 2012, a decrease of 6.5% over last year and a loss of 0.2 wallet-share points. Within the top 25, RBC Capital Markets saw the biggest year-over-year wallet-share gain of 0.8 points, followed by Citi, Barclays and Wells Fargo, each with gains of 0.6 wallet-share points over 2011.

Financials, Resources and Industrials Account for 63% of Global Investment Banking Fee Pool

Investment banking activity in the financials, energy & power, industrials and materials sectors accounted for 63% of the global fee pool during full year 2012. JP Morgan topped the fee rankings in eight sectors during full year 2012, with double-digit wallet-share in the healthcare sector. Deutsche Bank, bolstered by sovereign debt underwriting, registered a 6.3% share of government and agency underwriting activity, which fell 7% over full year 2011. Morgan Stanley, bolstered by strength in IPO underwriting, captured 10.7% of technology investment banking fees during full year 2012.

Debt Capital Markets Fees Account for 30% of Global Fees; M&A Fees Fall 12%; Slowest Year for ECM fees since 2003

Fees from debt capital markets underwriting totaled US$22.5 billion, an increase of 26% compared to last year's tally and accounted for 30% of overall IB fees this year. M&A advisory fees totaled US$20.5 billion during full year 2012, a decrease of 12% over the same period last year, and accounted for 27% of the global fee pool. Equity capital markets underwriting fees totaled US$15.6 billion during full year 2012, registering a 17% decrease from the year ago period and the slowest annual period for ECM fees since 2003.

Financial Sponsor-related Fees Hit $10 billion, Down 1% from 2011; The Carlyle Group LP Tops Financial Sponsor Rankings

Investment banking fees generated by financial sponsors and their portfolio companies reached $10.0 billion during full year 2012, a decline of 1% compared to full year 2011. Fees generated from leveraged buyouts accounted for 37% of financial sponsor-related fees during 2012, on par with the composition of financial sponsor-related activity seen since the 2008 financial crisis. The Carlyle Group LP and related entities generated $396 million in investment banking fees this year, an increase of 43% compared to full year 2011, while Goldman Sachs collected an industry-leading 7.5% of financial sponsor-related fees during full year 2012.

Source - Thomson Reuters

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