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Investment banking fees rise 13% as deal volumes surge

Thursday, October 2, 2014 - 19:31

[LONDON] Increased deal activity in the first nine months of the year has netted investment banking advisers US$68.8 billion in fees, 13 per cent more than they earned a year earlier, new data showed on Thursday.

It was the best start to the year for investment banking fees since 2007, according to data for the year to Oct. 1, compiled by Thomson Reuters and Freeman Consulting.

Greater levels of confidence and the availability of cheap financing have encouraged companies to pull the trigger on mergers and acquisitions, lifting volumes by more 60 per cent to US$2.7 trillion, while strong investor demand has driven up equity capital market (ECM) deals by a quarter to US$678.1 billion, separate data showed this week.

The end of the third quarter featured Chinese e-commerce company Alibaba's US$25 billion initial public offering (IPO), for which bankers earned fees of US$300 million.

The deal, the world's largest ever listing, helped to lift fees in the Asia Pacific region by 23 per cent in the first nine months. Elsewhere, fees rose by almost a third in Europe, while in the Americas fees were 7 per cent higher. Only Japan recorded a decline, with fees down 11 per cent.

Wall Street bank JPMorgan, a joint bookrunner on the Alibaba IPO, topped the league table for fees, having earned US$5 billion by the end of the third quarter and making up 7.6 per cent of the total fee pool.

The top 10 was largely unchanged from a year earlier, with Bank of America Merrill Lynch and Goldman Sachs maintaining second and third places respectively.

Only RBC Capital Markets made an improvement, jumping one place to replace UBS in tenth position. - Reuters