Asia-Pac corporate and investment banking to feel cost pinch in 2015: consultancy

GLOBAL corporate and investment banking revenue was flat last year compared to 2013 at 985 billion euros (S$1.57 trillion), reflecting cost pressures, overcapacity, and paltry economic growth, a report by consultancy Roland Berger said on Thursday.

Bucking the trend, the Asia-Pacific region registered a 3 per cent growth in revenue to 396 billion euros in 2014, but the consultancy warned that regional institutions will feel the same pinch as their global counterparts this year.

"Even though leading regional institutions have so far successfully developed with a low cost/income model, growing their revenues faster that their cost base, we expect to see a turning point in 2015; they will feel the double negative of lower revenues and still inflating cost base," said Philippe Chassat, head of financial services practice, South-east Asia, at Roland Berger, in a press statement.

In Asia-Pacific, corporate banking revenue rose on the back of stronger gains from transaction banking and lending. But investment banking revenue contracted by 10 per cent from a year ago. Revenue from fixed income, commodity and currency dropped 6 per cent, while equity sales slipped by one per cent.