Global investment banking review H1 2018: Thomson Reuters

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Worldwide Investment Banking Fees Reach US$52.0 Billion During the First Half of 2018; Estimated Fees in the Americas Down 4%

Fees generated by global investment banking activities totaled US$52.0 billion during the opening six months of 2018 with a 5% year-over- year decline compared to 2017. Imputed fees in the Americas accounted for 50% of the global fee pool with US$26.2 billion in fees, a 4% decrease compared to the same period last year. IB fees in Europe registered a 6% downtick compared to a year ago totaling US$12.5 billion. The Asia-Pacific region generated an estimated US$9.6 billion in IB fee revenue, a 9% decline compared to 2017. Japan registered a 9% uptick in fees with a total of US$2.8 billion,the only region to post a year-over-year increase.

JP Morgan Holds the Top Spot for Global Investment Banking Fees; the Top Five Banks by Fees Post a 1.0 Point Gain in Wallet Share

JP Morgan retained the top spot in the global investment banking fee rankings, capturing 7.2 points of wallet share, or US$3.8 billion in imputed fees. Goldman Sachs maintained the second position from the same period last year with US$3.2 billion in IB fee revenue and 6.1 points of wallet share. Morgan Stanley climbed two positions to third during the first half of 2018, with Bank of America Merrill Lynch and Citi both falling one rank to fourth and fifth, respectively. The top five investment banks, by fees, captured 28.3 points in wallet share during this year-to-date period, a 1.0 point gain compared to the same period last year.

Financials Constitute 31% of Global IB Fees; Media & Entertainment Fees Post 31% Uptick; Energy & Power Fees Down 20%

The financials industry accounted for the largest share of worldwide IB fees with an estimated US$15.9 billion, or 31% of the global total during the first six months of 2018. The Media & Entertainment sector posted a 31% increase compared to the same period during 2017 with US$2.3 billion in IB fee revenue, driven by a 47% uptick in M&A fees. Fees in the Energy & Power sector fell 20% year-over-year to US$5.0 billion with a 34% downtick in M&A fees compared to the previous year. Technology-related fees are particularly concentrated with the top five banks controlling 41% of tech-related fees.

The Carlyle Group and JP Morgan Top the Financial Sponsor Rankings; Financial Sponsor Fees Decrease 12%

Global investment banking fees generated by financial sponsors and their portfolio companies totaled US$5.7 billion during the first half of 2018, a 12% downtick compared to last year. Imputed fees from portfolio companies reached US$2.02 billion, accounting for the largest portion of sponsor fees at 36%. M&A exits constituted the second biggest portion at 35%, or US$1.98 billion in fees. The Carlyle Group claimed the top spot for financial sponsors during the first six months of 2018, jumping three spots from fourth a year ago. JP Morgan topped the rankings as the top bank for financial sponsors, also up from fourth last year.

Merger & Acquisition Fees Down 6%; Debt Capital Markets Decrease 9%; Equity Capital Markets Down 7%; Syndicated Lending Up 3%

Global IB fees during the opening six months of 2018 are down in three of the four product groups compared to the same period last year. M&A-related fees reached US$14.0 billion, down 6% compared to a year ago driven by a 34% downtick in the Energy & Power sector. DCM underwriting constituted the largest portion of fees during the first half 2018 at 29%, or US$15.0 billion. ECM underwriting totaled US$10.8 billion in IB fee revenue, down 7% year-over-year with fees generated by follow-on offerings falling 16%. Syndicated lending increased 3% compared to the same period last year with US$12.1 billion in fees.

Source: Thomson Reuters

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