LONDON (Reuters) - Investment banking fees in the Americas, the most lucrative region in the world, fell by nearly a fifth in the first nine months of 2016 from a year earlier, outpacing a global decline, Thomson Reuters data shows.
Global fees for services ranging from merger and acquisitions advisory services to capital markets underwriting fell 11 percent to $60.9 billion to the end of September, the slowest nine months for fees since 2012.
In the Americas, fees fell 19 percent to total $32 billion, still over half the global pool. In Europe, the Middle East and Africa (EMEA) they fell 12 percent to $14.7 billion, whilst in Asia Pacific they increased 19 percent to $9.6 billion.
Thomson Reuters M&A data shows the euphoria that drove merger mania in 2015 has subsided, with worldwide M&A activity down 22 percent year-on-year to $2.4 trillion in the first nine months of 2016.
The stock market is hovering at record highs, while the S&P 500 Index’s price-to-earnings ratio is at its highest level since the 2008 financial crisis. Uncertainty over the U.S. Federal Reserve’s policy on interest rates, Britain’s vote to leave the European Union and fears of a slowdown in China have made companies more cautious when it comes to M&A.
Equity capital market fees saw the steepest decline of 29 percent compared to a year ago to total $11.4 billion, dragged down by a 41 percent drop in fees from initial public offerings.
Fees from underwriting bond deals rose 9 percent to $18.9 billion and M&A revenue declined 7 percent to $18.8 billion, compared to a year ago.
JPMorgan (JPM.N) topped the global league table for fees, pulling in $3.2 billion during the first nine months, a decline of 10 percent compared to a year earlier, followed by Goldman Sachs (GS.N) and Bank of America Merrill Lynch (BAC.N).
None of the European investment banks made it into the top five, and Deutsche Bank, beset by woes, slipped one position to rank number nine, with a 27 percent decline in investment banking fees to total $1.2 billion for the first nine months of the year.
Despite a rise in Asia investment banking fees, U.S. investment banks Goldman Sachs (GS.N) and Bank of America Merrill Lynch (BAC.N) are each cutting investment bankers in the region in response to declining advisory fees and heightened local competition.
Whilst Morgan Stanley (MS.N) topped the league table for fees in the Asia Pacific region, the next three banks - CITIC, Industrial and Commercial Bank of China and Bank of China - are all Chinese.
Reporting by Anjuli Davies; Editing by Adrian Croft